Ultimately, the study aimed to determine the significance of finance to the Brazilian economy from 1981 to 2019. On account of the nature of data stationarity, the study then adopted the autoregressive distributed lag (ARDL) modelling technique which possesses the ability to produce both long-run and short-run parameter estimates. The empirical outcome of the Brazilian growth model which has been achieved is the product of conscious and purposeful reforms to address financial and other macroeconomic deficiencies and crisis in the country. Given the theoretical assumptions and the empirical evidence, it could be concluded that credit, FDI, and human development were economically significant to the economic development of Brazil in the long-run. Although trade openness, gross capital formation, and external borrowing did not significantly account for the economic development of the Brazilian economy, they transmit the appropriate theoretical influence. However, the finance variables were seen to exert negative influence on economic growth in Brazil.
Top1. Introduction: A Brief Background Of Brazil
Much of Brazil's history begins on Wednesday, April 22, 1500, the day the Portuguese explorer Pedro Álvares Cabral (c. 1467 - c. 1520) anchored his ship near Monte Pascoal in the present-day state of Bahia in north-eastern Brazil. Of course, the Portuguese were not the first to set foot in the country. Prior to their arrival, it was estimated that between two and four million indigenous peoples lived in some 2,000 countries and tribes of Brazil's wealthy coastal regions, from the present-day states of Maranana and Para in the north to Santa Catarina in the south. Currently, Brazil ranks fifth in the worldCurrently, Brazil ranks fifth in the world after Russia, Canada, China and the United States. With a total area of 3,287,612 square miles, it has the 7th largest population in the world, estimated at 215,313,498 by July 2022 (www.worldpopulationreview.com).
Brazil is the largest country in South America, covering 47% of the continent. The Atlantic coast spans 4,655 miles and has nearly 10,000 miles of inland borders with South American countries such as Uruguay to the south. Southwest Argentina, Paraguay and Bolivia; western Peru; northwest Colombia; Northern Venezuela, Guiana, Suriname, French Guiana. In fact, it borders all South American countries except Ecuador and Chile. In the Amazon, Brazil has unparalleled biodiversity, with more than a third of the world's species living in tropical rainforests. Brazil has five main types of climate: equatorial, tropical, semi-arid, tropical and subtropical plateaus, providing a diverse environment.
Figure 1. Geographical map of Brazil
Although present-day Brazil is divided into 26 states and federal districts, the Brazilian National Institute of the Earth (Instituto Brasileiro de Geografia e Estatística) has divided the country into five main geographical divisions. The north consists of the southern slopes of the mountains of Guyana and the mountains of northern Brazil and the Amazon basin. Considered the birthplace of Brazil, the northeast is known for its hot climate, beautiful beaches, and rich cultural traditions, including carnival. Of the 53.6 million population, about 15 million live in the dry interior or sertans, while the rest live in urban centers such as El Salvador, Recife and Fortaleza. Brasilia, the designated capital of Brazil in the Midwest, is located in an area known as the Federal District (Federal District). The other area is the lowlands of Mato Grosso and Mato Grosso do Sul, which consist mainly of the Pantanal, one of the largest tropical wetlands in the world. The Southeast Region of Brazil is the richest region in Brazil with a 60 per cent of its GDP. It contains São Paolo, Rio de Janeiro and Minas Gerais, the country’s richest states.
Top2. Historical Overview Of The Economic Management Philosophy Of Brazil
The global prominence of the Brazilian economy has been one of the most prominent features of the international economic landscape over the past two decades. Synonymous with growing economic instability and income inequality in the late 1970s and 1980s, Brazil represents a promising destination for sustainable growth, with increasingly favorable results in tackling entrenched poverty at the end of the last decade and narrowing the income gap between the rich. and poor. In doing so, Brazil has adopted and implemented several philosophies of structural change that are not only fertile ground for foreign direct investment but also raise international interest as an example of a country seeking to combine economic dynamism with poverty reduction and a social economy. righteousness. .
Undoubtedly, the development and implementation of the Plano Real Comprehensive Stabilization Plan was a decisive turning point in Brazil's economic recovery. Introduced between 1993 and 1994 by Finance Minister and then President Fernando Enrique Cardoso, this plan combines unorthodox and orthodox macroeconomic elements (Amann & Barrientos, 2014). Inflation in Brazil in 1970s was running at more than 1000 per cent and the economy had suffered huge contractions in output. It introduced a pegged exchange rate gradually and cleverly. Along with trade liberalization, this maintained an external check on domestic price formation.