A heterodox rereading of Bresser-Nakano

ABSTRACT Bresser-Pereira and Nakano argue, in their article on stable growth, that the fiscal adjustment has already been effectively carried out in Brazil. For them, what needs to be done, contrary to the orthodox demands for more fiscal adjustment, is an active commercial and industrial policy to stimulate exports, to complement the lower interest rate and a more devalued exchange rate. It is suggested here that capital controls would be necessary to maintain relative exchange rate stability, following Keynes’ heterodox ideas.