COMPARISON OF GDP IN BRAZIL AND THE UNITED STATES GDP in Brazil and U.S.

Gross domestic product (GDP) is one way by which to measure the performance of an economy. Even more important than the actual value of the GDP is the growth that the GDP is able to sustain over a period of time. Stable economies are generally able to sustain modest levels of growth without significant variations. Unstable economies may have wild variations in their GDP over a period of time; this is part of their instability. When comparing the GDPs of two different countries, it is necessary to take into account external factors that might contribute to the different GDP levels. Inflation, government policies, international pressure, political issues, and other factors can influence a nation's GDP levels. In addition, the globalization of the world's economies can also influence the GDP that a nation is able to create and sustain. This research considers the GDP growth rates of Brazil and the United States, including factors that might contribute to differences in that rate.

The following chart illustrates the annual growth rates in GDP for Brazil and the United States for the past 30 years (Shane 2003). Over the past 10 years, the two GDPs have generally tracked one another, with some slight variation. This is not unexpected since the world as a whole has grown more economically integrated and so GDPs in general may be expected to track one another more closely.

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vest more in education and health to remedy this inequity (Foster 5). Market liberalization and economic stabilization significantly enhanced Brazil's growth prospects in the 1990s. Brazil's trade increased from $50 billion in 1990 to $100 billion in 1996. The United States represented approximately 20 percent of that trade, and ran small trade surpluses in 1995 and 1996 after many years of deficits with Brazil. Foreign direct investment increased from less than $1 billion in 1993 to an estimated $7 billion in 1996. The United States was the largest foreign investor in Brazil, accounting for almost $20 billion, or 34 percent, of total foreign investment in 1996. Privatization in the telecommunication, energy and mining sectors of Brazil planned for 1997 and 1998 was also of major interest to the country's GDP ("The Recovery" 40). Today, Brazil is led by Luiz da Silva, and his government is following the general economic policies put in place by his predecessor. This includes a commitment to keeping inflation low, a condition of some of the financial assistance provided by the International Monetary Fund to Brazil. This requires careful fiscal policies that do not take on too much government spending, although many analyst
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