COMPARISON OF GDP IN BRAZIL AND THE UNITED STATES
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.
Brazil encompasses 8.5 million square kilometers and has a population of 182 million. It is rich in natural resources, and has a strong manufacturing, agricultural and mining sectors. The nation has the largest of all South American economies, and GDP of $1.34 trillion in 2002, with per capita GDP of $7,600 in 2002 ("Brazil" 1).
Brazil embarked on its most successful economic stabilization program of the 1990s, the Plano Real in July 1994. Inflation, which had reached an annual level of nearly 5000 per...