Matt O'Brien notes:
“Brazil’s economy has been going through a fairly standard emerging-markets crisis. It started in the early 2000s when the global commodity boom sent Brazil’s growth up so much that households began borrowing a lot more, and foreign money came pouring in to try to get a piece of the pie. This was good while it lasted, but the problem is that it didn’t last.
By 2014, all this had gone into reverse: Commodities had collapsed, consumers had slowed down their borrowing, and, in part because of the end of the U.S. Federal Reserve’s quantitative easing program, money that had gone to Brazil in search of higher returns now returned to the United States….
In normal times, this kind of economic failure would just be a political one for the party in power. It would lose the next election to its main rival. But these were not normal times. A pervasive corruption scandal at the state-owned oil company implicated not only the center-left Workers Party, but also the center-right Democratic Movement party. That meant there was an opening for someone to argue that it was time to throw all the bums out — and with a vigor that wasn’t necessarily compatible with democratic niceties”.
Update:
Populism's Common Denominator by Barry Eichengreen
Update:
Populism's Common Denominator by Barry Eichengreen