On Tuesday, Brazil’s President Dilma Rousseff pled for her cabinet to embrace fiscal tightening and further austerity measures aimed to conquer Brazilian stagflation and “restore business confidence and growth” as she heads into her second term.1 She wants to bring down rapid inflation, about 6.5% annually, lower interest rates and stimulate spending to boost employment and raise incomes.2 In terms of tax policy, Rousseff wants to alleviate the burden on businesses, encourage private sector investment and boost export competitiveness.1
Economy and Development
Are poverty alleviation programs short-term solutions or do they provide vulnerable individuals with opportunities to escape long-run deprivation? This policy question has been an ongoing source of debate between economists.1 For instance, Jeffrey Sachs has defended these programs, claiming that aid generates incentives for the poor to lift themselves out of poverty. William Easterly disagrees, arguing that aid creates dependency and that policymakers should instead focus on promoting economic growth.