By Mark Weisbrot, Jake Johnston, and Julia Villarruel Carrillo
This paper looks at Brazil’s unusually high interest rates. Brazil has the fourth-highest interest burden in the world on its federal debt (out of a total of 183 countries). The paper finds that this is not a result of known risk factors, but rather is due to unusually high interest rates set by the Central Bank Brazil’s policy interest rates have also been among the highest in the world  and to the market and political power of a highly concentrated banking sector. The authors warn that unless Brazil corrects its monetary policy, it could contribute to another severe, long-term growth failure comparable to the experience of 19802003. During that time, per capita GDP growth averaged about 0.2 percent per year.
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