Crescimento econômico e liquidez externa no Brasil após 1970

This paper assesses the relationship between the capital account and the Brazilian economic growth according to balance-of-payments constraint approach. The Thirlwall (1979)´s simple rule is extended to take into consideration capital account and several empirical evidence using time series analysis are shown. Conversely to the simple rule when fitted rates of balance-of-payment equilibrium economic growth average bellow the observed ones, fitted rates of growth using the rule extended to international liquidity are consistently greater than the observed ones. It is fair to conclude that, first, the Brazilian economy grows better during abundant international liquidity and, second, the economy sub utilizes such advantage growing far less than it could grow.

Balance of payment crises and capital flows : the role of liquidity

A model of externaI CrISIS is deveIoped focusing on the interaction between Iiquidity creation by financiaI intermediaries and foreign exchange collapses. The intermediaries' role of transforming maturities is shown to result in larger movements of capital and a higher probability of crisis. This resembles the observed cycle in capital fiows: large infiows, crisis and abrupt outfiows. The mo deI highlights how adverse productivity and international interest rate shocks can be magnified by the behavior of individual foreign investors linked together through their deposits in the intermediaries. An eventual collapse of the exchange rate can link investors' behavior even further. The basic model is then extended, quite naturally, to study the effects of capital fiow contagion between countries.