The Interconnection of the Brazilian and Chinese Economies

BRAZIL ECONOMICS - Report 27 Sep 2021 by Affonso Pastore, Cristina Pinotti and Paula Magalhães

THE MONETARY POLICY MAP – Next Wednesday, BRAZILIAN GROWTH AND COMMODITY PRICES – The best way to depict the dependence of growth of the Brazilian economy on Chinese growth is to examine the dispersion diagram in Graph 1. The Granger causality test based on quarterly data shows that variations of commodity prices cause variations in Brazilian GDP growth rather than the contrary. The commodities super-cycle between 2002 and 2011 was a an important factor to raise average Brazilian growth above 3.5% a year, and the rapid recovery after the recession of 2020 benefited from the expansion of 57% of the CRB commodity price index (Graph 2).

Now read on...

Register to sample a report

Register