Sunday, in Big State

Pastore did a good job today; showing a nice correlation between commoditie prices and Brazil's GDP growth rate. With the end of the super-cycle led by China, Brazil -- and for that matter nearly all LA -- will have a hard time growing at 4% again. Lula was extremely lucky. Pastore likes granger-causality tests. Dear Afonso (doppia ff?), this test means simply one variable's moves precedes movements in the other one. In the case at hand however, you can claim true causation!

Dear Persio, you too did a good job in the interview...smaller government and taxes coupled with more openness is the right way forward. And less public credit. Now, stop asking for lower target for inflation, 4.5% is good enough. If we only could make sure the BC does pursue this goal. Why dissipate energies asking for 3%? It is irrelevant in terms of welfare and politically costly.