Macroeconomics In Brazil
Macroeconomics- Final Project
Source: The World Bank & OECD- All figures are annually based.
The country of Brazil is the both the largest, in terms of territory, and most populated country in South America. The country’s largest exports consist of coffee, iron ores and concentrates, petroleum oil, raw sugar, and soya beans. Brazil’s largest trade partners (in both import and export) include: China, The United States, and Argentina. (The Atlas of Economic Complexity, 2011)
Source: The World Bank & OECD- All figures are annually based.
Mexico is the second largest country economy and population in Latin America, behind Brazil, bordered directly by the U.S. to the North and Central America to the south. The country’s largest …show more content…
exports are petroleum oils, cars, television parts such as monitors and projectors. The major export trade partners of the country include The United States and Canada, with its major trade import partners being The United States, China, and Japan. (The Atlas of Economic Complexity, 2011)
Variable Trends and Contrast
GDP and GDP Growth Rate
Brazil is an emerging market economy, evidenced by rising GDP, GDP per capita, characterized by fast economic growth, and increased foreign direct investments. (Williams, 2011) Brazil has experienced a steady (but slow) growing annual GDP in the last decade. This increasing trend can be credited to Brazil’s government enacting policies which invest in growing the country’s agricultural sector by providing new technology for farmers to work more efficiently, directly their agricultural program PRONAF. In the last 10 years, Brazil as implemented sound macroeconomic governmental policies; such as tax incentives for foreign investors, and developing its infrastructure through the implementation of PAC (Growth Acceleration Program). PAC aims to develop and grow the Brazilian economy in terms of logistics, transportation, energy sources, and developing social and urban areas to improve living standards in impoverished communities. (Bernardo, 2010) The program also heavily funds scientific and technological research to advance production efficiency through the increase of physical capital, and promoting technological progress, which has made Brazil a highly attractive foreign investment market.
Mexico’s growth rate is steadier than that of Brazil for the majority of the last decade. However, it is much lower than Brazil, in part because of the misallocation of resources. According to the World Bank, Mexico has high energy prices, (part of its inefficient regulation policies) which diminishes its capacity for comparative advantage in its manufacturing sector, in part due to its lack of skilled labor, limiting its percentage of GDP focused on education, in stark contrast to that of Brazil, who focuses on improving its human capital through education and technological advances, using a larger portion of its GDP for these purposes. Neither country was unscathed by the global financial crisis, with both Brazil and Mexico’s inflation rate decreasing to negative numbers during the crisis’ height. However, Mexico seems to have bounced back at a more steady and higher GDP growth rate than Brazil in the years following the financial crisis, this may be due to China’s increase in labor production costs- causing Mexico to regain its comparative advantage in some quarters, but only marginally. (World Bank, Mexico Overview) According to the Wall Street Journal and Bloomberg, Mexico’s direct foreign investment rate has also dropped drastically in the last 10 years, lack of infrastructures, and modernization of its foreign investment policies creates sluggish timetables for foreign countries looking to open businesses in the country, this may also create a slowdown in the country’s GDP growth rate. Brazil trumps Mexico in its foreign investment, due to its increase investment in making foreign investment more attractive in reforming its policies and tax incentives.
Exchange Rate
The value of a country’s currency rises and falls in response to supply and demand. (Mankiw, 2008) Brazil has been running a trade surplus for the past decade, therefore, demand for its currency increases because foreign buyers must exchange more of their domestic currency to buy goods from Brazil. The cost of living in Brazil is outrageous, according to several reports, one specifically by the Wall Street Journal (2011) reports that a Big Mac in Brazil is 72% higher than in other emerging economies. (Big Mac Index) (Overvaluing of currency) On the same lines, the average price of a large cheese pizza is $35.00 (in non-tourism) areas.
Just like Brazil, Mexico employs a floating exchange rate, determined by supply and demand. The Mexican currency has been appreciating steadily since the country’s currency crisis. Currency 's appreciation lowers export demand, increases the spending on imports, and according to Mankiw, 2008, a fall in domestic aggregate demand, causing lower economic growth.
Inflation Rate
Inflation can have dire effects on any nation 's economy and is caused when the government prints too much money, according to Mankiw, 2008. According to the Wall Street Journal, the monetary authorities of the Brazilian government “hold the idea that inflations are neutral as long as they don’t skew the supply and demand for goods and services, and, therefore, have used money creation to remedy budget deficits—causing rising inflation.” The effect of this constant monetary injection is a downward sloping demand curve for money, for this reason; the Brazilian economy is in a constant adjustment process due to the changes in the money supply. The costs of inflation on the economy can include “menu costs”, “shoe leather costs”, relative price variability and misallocation of resources, among others. (Mankiw, 2008)
In stark contrast to the inflation reasons of Brazil, energy and transportation costs are the primary reason for Mexico’s inflation Through the use of inflation targeting, the Mexican Central Bank, as reported that inflation in the past 5 years have fallen below the target rates. Although lack of reforms in the energy sector, continues to allow for large inflation rates in energy prices throughout the country, increasing on average a rate of 0.40-0.50% per quarter in the last 4 years.
Interest Rate on short-term government debt
Source: Bacen Selic Brazil/ Banco do Brasil
The Brazilian government heavily relies on issuing bonds to pay foreign debt; however, with their federal fund interest rates usually much higher than foreign debt interest rates, they are simply moving their debt from one creditor to another (even though Brazil experiences higher than normal interest rates from international banks due to their poor BBB- credit rating). Brazil needed to counteract their inflation rate with high interest rates to increase the investment of dollars. (Williams, 2011) Brazil’s central bank usually aims for higher than target inflation rates, which increases the risk of inflation and causes the country’s central banks to increase rates dramatically and causes volatility in both the exchange rate and interest rate.
Mexico experiences much lower interest rates on its short-term government debt, and it also experiences a better international credit rating than Brazil, (although not much much) of BBB+.
Unemployment Rate
Despite the years of the global financial crisis, raising inflation, and with their GDP growth rate slowing in the last two years, Brazil has maintained a moderately low unemployment rate, though the unemployment rate did rise during the worst years of the crisis.
New emerging markets, such as offshore drilling, have created new jobs in the country, and Brazil has hurried to fill these positions, freeing up many job opportunities for recent graduate students or workers reentering the workforce to fill. However, it is important to consider that the number of actual people in Brazil employed has declined in recent years, but the number of people actively looking for work as declined at a much faster rate, pushing the unemployment rate down. According to the Wall Street Journal (Fick, 2013), the Brazilian government calculates that those who have removed themselves from the labor force are the elderly and students at university level; due to Brazil’s high salaries- their income is not needed to supplement family income during the country’s time of prosperity. Due to the country’s currency appreciation, salaries have tripled since 2007, way above the inflation mark. The country’s stimulus of their credit market (which increased lending) has created millions of new middle-class consumers with high consumer demand for new homes, cars, retail goods and services. Brazil also invests in educational programs for its workers thus increasing its human capital and productivity …show more content…
overall.
Mexico’s increasing trend, from 2008-2012, in the country’s unemployment, can be directly attributed to the country’s loss of market share in international trade, specifically in the service industry (Mexico’s largest sector) to other countries with lower production costs. In addition to trade deficiencies, the financial crisis affected its tourism sector; however, Mexico’s crime rate in tourist areas (due to drug wars) has also risen in the last 10 years (more specifically, in the last 5), and tourism has declined dramatically due to public safety concerns, (outside of the financial crisis) further increasing the unemployment rate.
Trade Deficit
Brazil runs regular trade surplus, due to their increasing openness to the global trading world through new international trade policies and foreign investment policies, including significantly lowering their import tariffs, according to The Wall Street Journal. The country has also invested largely in modernizing their trade system, including custom inspection processes, and payments, thus making it easier for countries and companies to trade with Brazil. According to the WTO, Brazil is a member of multiple trade agreements including MERCOSUR, LAIA, (which consists of over 10 South American, Latin American and Caribbean markets), with its largest trade agreement being GSTP, a trade agreement between developing countries, including growing countries in Africa, West Asia, and Europe. It was this particular trade agreement that Brazil benefited from the most during the financial crisis, with their increased trade with developing and emerging countries; Brazil became less dependent. According to Williams, 2011, “Brazil kept its head above water during the financial crisis in part by relying on less demand from the developed world, meaning the demand for Brazilian goods stayed high even as developed world demand dropped precipitously.”
In stark contrast to Brazil, Mexico has experienced a steady trade deficit for the past 10 years. Many factors have attributed to this trend, including Mexico losing market share with its major trade partner, The U.S. to China, which is manufacturing substitute products at a much cheaper cost, drawing from their cheaper labor costs of production. According to the Bloomberg report (n.d.), “Mexico 's trade deficit widen”, the country has lost market share in the United States and Canada to China, at an average of 4.2% annually. In addition, the Mexican government has done little in terms of trade reforms to facilitate trade such as reduction of costs and modernizing processes as Brazil has done thru the implementation of new fiscal policies, including payment modernization and lowering of trade tariffs. However, Mexico has the significant advantage with trade to the United States for future growth as compared to Brazil, due to their NAFTA trade agreement.
Strengths/ Weaknesses and Analysis
Brazil’s strength lay in its openness to trade; it’s willingness to invest in programs such as PAC, which strengthen its infrastructure, including modernizing of seaports, transportation, logistics, and poverty reduction, including investing in educational programs to raise its human capital. Brazil consistently makes grand efforts to reform and improve government institutions and policies to further economic growth. However, as Brazil is an emerging market economy, it is not yet fully developed and still has many weaknesses. According to Williams, 2011, although the country is constantly reforming government policies, the Brazilian government spends too much money; this spending trend fuels the country’s high interest rates and currency appreciation, which in turn hurts exporters by raising the costs of domestically produced goods. Political corruption also impedes the country’s economic growth.
Mexico’s lack of investment in human capital has slowed its manufacturing capacities and allowed other markets to gain market share through their loss of competitive advantage. Also, their lack of government reform has, however, created a monopoly in its telecommunications sector and thus its competitiveness with other global markets. Although Mexico is part of NAFTA, the largest free trade agreement, their lack of openness to trade with other developing and emerging economies creates too much dependency on the United States and Canada as its sole major trade partners. Meanwhile, Brazil enjoys vast trading opportunities with developing countries, never remaining stagnate depending majorly on one country for their trade profits, allowing for a more diverse market of trade during the financial crisis. In order for Mexico to grow economically, it must reform human capital investment, regulate monopolies in their telecommunication 's sector to reduce the price and increase the availability of technological advances. Similar to Brazil, Mexico too experiences large amounts of political corruption- more so, in the country’s constant battle with large drug cartels and drug violence. Mexico is currently in the process of approving new fiscal policy reforms to develop its economy including programs to increase productivity through educational provisions and reduce poverty, as of 2013. These new government reforms are propelling Mexico to surpass Brazil’s economy in the next 20 years, becoming a developed nation faster than Brazil, if the country executes these reforms soon, according to Andrianova, A., of The Global Post. These new reforms will also reopen Mexico’s economy to discouraged foreign investors once again. Mexico’s greatest economic advantage is its manufacturing sector, far exceeding Brazil, who mainly relies on commodities for international trade. If Mexico’s labor costs continue flatley, it may once again regain its comparative advantage and its NAFTA ties further the growth of its trade capacities and profits. Neither Brazil or Mexico have gained a significant advantage over one or the other; they are the two largest economies in Latin America, and there economic outcomes are currently being researched by economists with one side arguing that Brazil will surpass Mexico in the next 15 years, and the other saying that Mexico’s reliance on trade with the United States will propel the country to large bouts of economic growth as the United States continues to recover and pull out of recession.
References
Andrianova, A. (2013, April 03). Why mexico 's become a hotter investment than brazil. Retrieved it from http://www.globalpost.com/dispatches/globalpost-logs/chatter/mexico-vs-brazil-brics-emerging-economies-g20
Banco central do brasil . (n.d.). Retrieved it from http://www.bcb.gov.br/Bernardo, P. Portal Da Industria, Minister of the Interior (2010). Pac growth acceleration program brazil- Germany great economic meeting. Retrieved it from this website: http://www.cni.org.br/portal/data/files/00/8A9015D016D319F20116E9434E1120C5/Programa de Aceleração do Crescimento - Min Paulo Bernardo.pdf
Blankfield, K. (2010, 12 13). Is brazil 's economy that is getting too hot? Forbes, Retrieved it from http://www.forbes.com/sites/kerenblankfeld/2010/12/13/is-brazils-economy-getting-too-hot/
Fick, J.
(2013). Brazilian unemployment matches record low, but more dropping out of work force. Wall Street Journal, Retrieved it from http://blogs.wsj.com/economics/2013/12/20/brazilian-unemployment-matches-record-low-but-more-dropping-out-of-work-force/
Organization for economic cooperation and development. (OECD) (n.d.). Retrieved it from http://stats.oecd.org/ http://www.nationsonline.org/oneworld/brazil.htmThe atlas of economic complexity. . (2011). (Master 's thesis, MIT), Available from The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. Retrieved it from http://atlas.media.mit.edu/country/bra/The world bank. (Mexico) (n.d.).Retrieved it from http://www.worldbank.org/en/country/mexico
Mankiw, N. G. (2008). Principals of Macroeconomics (6th ed.). Mason, OH: Cenage Learning.Mexico 's trade deficit widens. (n.d.). Retrieved from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYsQYY62cqSYWilliams, S. (2011). Why is brazil an emerging market economy?. (Master 's thesis, University of Iowa College)Retrieved it from http://ebook.law.uiowa.edu/ebook/uicifd-ebook/why-brazil-emerging-market-economyWorld trade organization. (n.d.). Retrieved from
http://www.wto.org/english
Source: The World Bank & OECD- All figures are annually based.
The country of Brazil is the both the largest, in terms of territory, and most populated country in South America. The country’s largest exports consist of coffee, iron ores and concentrates, petroleum oil, raw sugar, and soya beans. Brazil’s largest trade partners (in both import and export) include: China, The United States, and Argentina. (The Atlas of Economic Complexity, 2011)
Source: The World Bank & OECD- All figures are annually based.
Mexico is the second largest country economy and population in Latin America, behind Brazil, bordered directly by the U.S. to the North and Central America to the south. The country’s largest …show more content…
exports are petroleum oils, cars, television parts such as monitors and projectors. The major export trade partners of the country include The United States and Canada, with its major trade import partners being The United States, China, and Japan. (The Atlas of Economic Complexity, 2011)
Variable Trends and Contrast
GDP and GDP Growth Rate
Brazil is an emerging market economy, evidenced by rising GDP, GDP per capita, characterized by fast economic growth, and increased foreign direct investments. (Williams, 2011) Brazil has experienced a steady (but slow) growing annual GDP in the last decade. This increasing trend can be credited to Brazil’s government enacting policies which invest in growing the country’s agricultural sector by providing new technology for farmers to work more efficiently, directly their agricultural program PRONAF. In the last 10 years, Brazil as implemented sound macroeconomic governmental policies; such as tax incentives for foreign investors, and developing its infrastructure through the implementation of PAC (Growth Acceleration Program). PAC aims to develop and grow the Brazilian economy in terms of logistics, transportation, energy sources, and developing social and urban areas to improve living standards in impoverished communities. (Bernardo, 2010) The program also heavily funds scientific and technological research to advance production efficiency through the increase of physical capital, and promoting technological progress, which has made Brazil a highly attractive foreign investment market.
Mexico’s growth rate is steadier than that of Brazil for the majority of the last decade. However, it is much lower than Brazil, in part because of the misallocation of resources. According to the World Bank, Mexico has high energy prices, (part of its inefficient regulation policies) which diminishes its capacity for comparative advantage in its manufacturing sector, in part due to its lack of skilled labor, limiting its percentage of GDP focused on education, in stark contrast to that of Brazil, who focuses on improving its human capital through education and technological advances, using a larger portion of its GDP for these purposes. Neither country was unscathed by the global financial crisis, with both Brazil and Mexico’s inflation rate decreasing to negative numbers during the crisis’ height. However, Mexico seems to have bounced back at a more steady and higher GDP growth rate than Brazil in the years following the financial crisis, this may be due to China’s increase in labor production costs- causing Mexico to regain its comparative advantage in some quarters, but only marginally. (World Bank, Mexico Overview) According to the Wall Street Journal and Bloomberg, Mexico’s direct foreign investment rate has also dropped drastically in the last 10 years, lack of infrastructures, and modernization of its foreign investment policies creates sluggish timetables for foreign countries looking to open businesses in the country, this may also create a slowdown in the country’s GDP growth rate. Brazil trumps Mexico in its foreign investment, due to its increase investment in making foreign investment more attractive in reforming its policies and tax incentives.
Exchange Rate
The value of a country’s currency rises and falls in response to supply and demand. (Mankiw, 2008) Brazil has been running a trade surplus for the past decade, therefore, demand for its currency increases because foreign buyers must exchange more of their domestic currency to buy goods from Brazil. The cost of living in Brazil is outrageous, according to several reports, one specifically by the Wall Street Journal (2011) reports that a Big Mac in Brazil is 72% higher than in other emerging economies. (Big Mac Index) (Overvaluing of currency) On the same lines, the average price of a large cheese pizza is $35.00 (in non-tourism) areas.
Just like Brazil, Mexico employs a floating exchange rate, determined by supply and demand. The Mexican currency has been appreciating steadily since the country’s currency crisis. Currency 's appreciation lowers export demand, increases the spending on imports, and according to Mankiw, 2008, a fall in domestic aggregate demand, causing lower economic growth.
Inflation Rate
Inflation can have dire effects on any nation 's economy and is caused when the government prints too much money, according to Mankiw, 2008. According to the Wall Street Journal, the monetary authorities of the Brazilian government “hold the idea that inflations are neutral as long as they don’t skew the supply and demand for goods and services, and, therefore, have used money creation to remedy budget deficits—causing rising inflation.” The effect of this constant monetary injection is a downward sloping demand curve for money, for this reason; the Brazilian economy is in a constant adjustment process due to the changes in the money supply. The costs of inflation on the economy can include “menu costs”, “shoe leather costs”, relative price variability and misallocation of resources, among others. (Mankiw, 2008)
In stark contrast to the inflation reasons of Brazil, energy and transportation costs are the primary reason for Mexico’s inflation Through the use of inflation targeting, the Mexican Central Bank, as reported that inflation in the past 5 years have fallen below the target rates. Although lack of reforms in the energy sector, continues to allow for large inflation rates in energy prices throughout the country, increasing on average a rate of 0.40-0.50% per quarter in the last 4 years.
Interest Rate on short-term government debt
Source: Bacen Selic Brazil/ Banco do Brasil
The Brazilian government heavily relies on issuing bonds to pay foreign debt; however, with their federal fund interest rates usually much higher than foreign debt interest rates, they are simply moving their debt from one creditor to another (even though Brazil experiences higher than normal interest rates from international banks due to their poor BBB- credit rating). Brazil needed to counteract their inflation rate with high interest rates to increase the investment of dollars. (Williams, 2011) Brazil’s central bank usually aims for higher than target inflation rates, which increases the risk of inflation and causes the country’s central banks to increase rates dramatically and causes volatility in both the exchange rate and interest rate.
Mexico experiences much lower interest rates on its short-term government debt, and it also experiences a better international credit rating than Brazil, (although not much much) of BBB+.
Unemployment Rate
Despite the years of the global financial crisis, raising inflation, and with their GDP growth rate slowing in the last two years, Brazil has maintained a moderately low unemployment rate, though the unemployment rate did rise during the worst years of the crisis.
New emerging markets, such as offshore drilling, have created new jobs in the country, and Brazil has hurried to fill these positions, freeing up many job opportunities for recent graduate students or workers reentering the workforce to fill. However, it is important to consider that the number of actual people in Brazil employed has declined in recent years, but the number of people actively looking for work as declined at a much faster rate, pushing the unemployment rate down. According to the Wall Street Journal (Fick, 2013), the Brazilian government calculates that those who have removed themselves from the labor force are the elderly and students at university level; due to Brazil’s high salaries- their income is not needed to supplement family income during the country’s time of prosperity. Due to the country’s currency appreciation, salaries have tripled since 2007, way above the inflation mark. The country’s stimulus of their credit market (which increased lending) has created millions of new middle-class consumers with high consumer demand for new homes, cars, retail goods and services. Brazil also invests in educational programs for its workers thus increasing its human capital and productivity …show more content…
overall.
Mexico’s increasing trend, from 2008-2012, in the country’s unemployment, can be directly attributed to the country’s loss of market share in international trade, specifically in the service industry (Mexico’s largest sector) to other countries with lower production costs. In addition to trade deficiencies, the financial crisis affected its tourism sector; however, Mexico’s crime rate in tourist areas (due to drug wars) has also risen in the last 10 years (more specifically, in the last 5), and tourism has declined dramatically due to public safety concerns, (outside of the financial crisis) further increasing the unemployment rate.
Trade Deficit
Brazil runs regular trade surplus, due to their increasing openness to the global trading world through new international trade policies and foreign investment policies, including significantly lowering their import tariffs, according to The Wall Street Journal. The country has also invested largely in modernizing their trade system, including custom inspection processes, and payments, thus making it easier for countries and companies to trade with Brazil. According to the WTO, Brazil is a member of multiple trade agreements including MERCOSUR, LAIA, (which consists of over 10 South American, Latin American and Caribbean markets), with its largest trade agreement being GSTP, a trade agreement between developing countries, including growing countries in Africa, West Asia, and Europe. It was this particular trade agreement that Brazil benefited from the most during the financial crisis, with their increased trade with developing and emerging countries; Brazil became less dependent. According to Williams, 2011, “Brazil kept its head above water during the financial crisis in part by relying on less demand from the developed world, meaning the demand for Brazilian goods stayed high even as developed world demand dropped precipitously.”
In stark contrast to Brazil, Mexico has experienced a steady trade deficit for the past 10 years. Many factors have attributed to this trend, including Mexico losing market share with its major trade partner, The U.S. to China, which is manufacturing substitute products at a much cheaper cost, drawing from their cheaper labor costs of production. According to the Bloomberg report (n.d.), “Mexico 's trade deficit widen”, the country has lost market share in the United States and Canada to China, at an average of 4.2% annually. In addition, the Mexican government has done little in terms of trade reforms to facilitate trade such as reduction of costs and modernizing processes as Brazil has done thru the implementation of new fiscal policies, including payment modernization and lowering of trade tariffs. However, Mexico has the significant advantage with trade to the United States for future growth as compared to Brazil, due to their NAFTA trade agreement.
Strengths/ Weaknesses and Analysis
Brazil’s strength lay in its openness to trade; it’s willingness to invest in programs such as PAC, which strengthen its infrastructure, including modernizing of seaports, transportation, logistics, and poverty reduction, including investing in educational programs to raise its human capital. Brazil consistently makes grand efforts to reform and improve government institutions and policies to further economic growth. However, as Brazil is an emerging market economy, it is not yet fully developed and still has many weaknesses. According to Williams, 2011, although the country is constantly reforming government policies, the Brazilian government spends too much money; this spending trend fuels the country’s high interest rates and currency appreciation, which in turn hurts exporters by raising the costs of domestically produced goods. Political corruption also impedes the country’s economic growth.
Mexico’s lack of investment in human capital has slowed its manufacturing capacities and allowed other markets to gain market share through their loss of competitive advantage. Also, their lack of government reform has, however, created a monopoly in its telecommunications sector and thus its competitiveness with other global markets. Although Mexico is part of NAFTA, the largest free trade agreement, their lack of openness to trade with other developing and emerging economies creates too much dependency on the United States and Canada as its sole major trade partners. Meanwhile, Brazil enjoys vast trading opportunities with developing countries, never remaining stagnate depending majorly on one country for their trade profits, allowing for a more diverse market of trade during the financial crisis. In order for Mexico to grow economically, it must reform human capital investment, regulate monopolies in their telecommunication 's sector to reduce the price and increase the availability of technological advances. Similar to Brazil, Mexico too experiences large amounts of political corruption- more so, in the country’s constant battle with large drug cartels and drug violence. Mexico is currently in the process of approving new fiscal policy reforms to develop its economy including programs to increase productivity through educational provisions and reduce poverty, as of 2013. These new government reforms are propelling Mexico to surpass Brazil’s economy in the next 20 years, becoming a developed nation faster than Brazil, if the country executes these reforms soon, according to Andrianova, A., of The Global Post. These new reforms will also reopen Mexico’s economy to discouraged foreign investors once again. Mexico’s greatest economic advantage is its manufacturing sector, far exceeding Brazil, who mainly relies on commodities for international trade. If Mexico’s labor costs continue flatley, it may once again regain its comparative advantage and its NAFTA ties further the growth of its trade capacities and profits. Neither Brazil or Mexico have gained a significant advantage over one or the other; they are the two largest economies in Latin America, and there economic outcomes are currently being researched by economists with one side arguing that Brazil will surpass Mexico in the next 15 years, and the other saying that Mexico’s reliance on trade with the United States will propel the country to large bouts of economic growth as the United States continues to recover and pull out of recession.
References
Andrianova, A. (2013, April 03). Why mexico 's become a hotter investment than brazil. Retrieved it from http://www.globalpost.com/dispatches/globalpost-logs/chatter/mexico-vs-brazil-brics-emerging-economies-g20
Banco central do brasil . (n.d.). Retrieved it from http://www.bcb.gov.br/Bernardo, P. Portal Da Industria, Minister of the Interior (2010). Pac growth acceleration program brazil- Germany great economic meeting. Retrieved it from this website: http://www.cni.org.br/portal/data/files/00/8A9015D016D319F20116E9434E1120C5/Programa de Aceleração do Crescimento - Min Paulo Bernardo.pdf
Blankfield, K. (2010, 12 13). Is brazil 's economy that is getting too hot? Forbes, Retrieved it from http://www.forbes.com/sites/kerenblankfeld/2010/12/13/is-brazils-economy-getting-too-hot/
Fick, J.
(2013). Brazilian unemployment matches record low, but more dropping out of work force. Wall Street Journal, Retrieved it from http://blogs.wsj.com/economics/2013/12/20/brazilian-unemployment-matches-record-low-but-more-dropping-out-of-work-force/
Organization for economic cooperation and development. (OECD) (n.d.). Retrieved it from http://stats.oecd.org/ http://www.nationsonline.org/oneworld/brazil.htmThe atlas of economic complexity. . (2011). (Master 's thesis, MIT), Available from The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. Retrieved it from http://atlas.media.mit.edu/country/bra/The world bank. (Mexico) (n.d.).Retrieved it from http://www.worldbank.org/en/country/mexico
Mankiw, N. G. (2008). Principals of Macroeconomics (6th ed.). Mason, OH: Cenage Learning.Mexico 's trade deficit widens. (n.d.). Retrieved from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYsQYY62cqSYWilliams, S. (2011). Why is brazil an emerging market economy?. (Master 's thesis, University of Iowa College)Retrieved it from http://ebook.law.uiowa.edu/ebook/uicifd-ebook/why-brazil-emerging-market-economyWorld trade organization. (n.d.). Retrieved from
http://www.wto.org/english