A macroeconomic assessment of the 2004-2016 period in Brazil: the cycle, crisis and resuming growth of the economy

Abstract Based on Keynes’ concept of convention, this article analyzes the cyclical decline of the Brazilian economy from 2011 to 2014 and the recession from 2015 to 2016 based on the relationship between the macroeconomic policies adopted, the conventions established and private investment. It is argued that contradictions and a lack of coordination marked fiscal, exchange rate and monetary policies in the 2011-2014 period, making optimistic conventions unfeasible and leading to the downward phase of the cycle. During 2015-2016, the mistaken economic policy, the political crisis and the Operation Car Wash (or Lava-Jato in Portuguese) led to the collapse of the Brazilian economy. Finally, the macroeconomic policies required for the sustained economic recovery are pointed out.