The Fallacy of the Dutch Disease in Brazil

The export boom, followed by a significant net trade surplus, has been primarily recognized for its crucial contribution to the country’s balanced current accounts. However, many economists are cautious about the growing trade surplus because of the exchange rate appreciation it has generated and its effects, particularly on the local industry. These discussions refer to a phenomenon detected in the Netherlands in the 1970s when the discovery of large natural gas deposits produced a significant impact on the country´s economy: if, on the one hand, exports allowed for an increase in wealth, on... Mehr ...