The Brazilian Economy in the Recent Decades: an Analysis Using Synthetic Control

Abstract

Applying the synthetic control method, this article analyzes the cyclical reversal of the Brazilian economy after 2010 and the 2015-2016 recession considering thirty-five macroeconomic, institutional, and sectoral variables. In general terms, it was observed that the inconsistency of fiscal and monetary policies, the low level of productivity (sectorial and aggregate), the internal rate of return on capital, investment rate, the declining economic complexity (which also affect technical progress and the productive specialization), as well as the low quality of institutions, explain, to a large extent, the lower economic growth performance in the period when compared to other emerging economies.