A critical analysis of the Brazilian 'expansionary fiscal austerity': why did it fail to ensure economic growth and structural development?

This paper discusses the Brazilian economy since 2015. After an economic boom from 2005 to 2011, Brazil entered a downturn, which resulted in a strong recession in 2015 and 2016. The Economic Authorities understood that the cause of the crisis was due to an expansionary economic policy undertaken over the period 2009-2014; thereby the solution for the recession would be quite the opposite: fiscal austerity and tight monetary policy. However, the restrictive economic policies did not grant growth: Brazil grew a little bit more than 1.0% on average over 2017-2019. It was this stagnated Brazil that the Covid-19 pandemic met, turning it worse than what had already been bad. In view of that, we explain why the 'expansionary fiscal austerity' failed to furnish growth and debate what should be undertaken to ensure a sustainable economic activity and structural development.