NEW MACROECONOMIC CONSENSUS IN BRAZIL: FISCAL POLICY FROM THE REAL PLAN TOPRESIDENT LULA'S SECOND MANDATE

ABSTRACT Fiscal policy implemented in Brazil at Real Plan followed the New Macroeconomic Consensus’ logic. The Plan started the changing of Brazilian’s fiscal regime into one in which fiscal policy must be confined to insuring a stable macroeconomic environment so private agents can make their decision. The regime is consolidated in 1999 crisis, when the tripod was adopted: flexible exchange rates, inflation targeting and primary fiscal surplus. Lula’s mandate deepens the conduction of fiscal policy accordingly until 2006, when it suffers a substantial change, both in its theoretical basement and in its implementation. Since then, Brazilian government has been more active over the economy, although fiscal policy keeps relevant characteristics of the previous phase. The 2008 world crisis endorsed the activism, but since the acute phase of the crisis is over, the sympathetic critics to the New Macroeconomics ideas have put hard theoretical and political resistances to the measures adopted.