Credit, underdevelopment and stagnation: a chronic of the Brazilian recession

Abstract

The slow and uneven recovery that has been occurring in some economies after the 2007-2008 international financial crisis is definitely not evident in the Brazilian case. In 2014 there is a significant deceleration in the rate of growth of the Gross Domestic Product (GDP) which, as of 2015, becomes a negative growth trend that persists to date. However, the profitability of the financial sector does not stop growing since the current economic and political crisis was installed in the country. The present work seeks to reflect on the paradox existing between the increase of financial resources available to boost the level of investments -and supposedly reactivate economic growth- and the signs of stagnation presented by the country's economy. Thus, the current recession of the Brazilian economy is discussed in light of two elements: a) the heterodox theoretical contribution, which deals with the role of credit in development, the contemporary characterization of underdevelopment in the stage of accumulation of capital with financial predominance, and in a prominent way, the political aspect, the explanation of the causes of economic stagnation -inspired in the work of Celso Furtado; and b) a brief review of some basic statistics, problematizing key aspects of the political economy of the Brazilian recession.