CRESCIMENTO COM RESTRIÇÕES DE BALANÇO DE PAGAMENTOS E DÉFICITS GÊMEOS NO BRASIL A PARTIR DOS ANOS NOVENTA

The economic literature contains extensive discussions on relationship between foreign constraints and economic growth. Since the beginning of the 1990's one debate concentrates on the nature of macroeconomic policies to expand domestic demand in Brazil in an environment of capital flows liberalization. An important analysis on export-led growth hypothesis has followed. The validity of such approach depends on the response of the current account to the policy regime, as well as the impact on investment coming from demand, as indicated by the Verdoorn Law. We contribute to this line of enquiry in two ways. First, we provide an assessment on the Thirlwall Law and introduce some specifications applied, mainly, to developing countries. The reverse causality for the so-called twin deficits is also examined. Our second contribution is to apply time series methods - impulse-response function in vector auto-regression (VAR) and dynamic regressions - to test some assumptions. We argue that Brazil will nor succeed to attain the required demand for sustained growth without gains in international competitiveness and the opening of new markets. The results suggest that favourable interest and exchange rate depend on reductions, to a certain extent, of speculative capital movements, as recommended by a representative number of distinguished scholars and policy makers.