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The Antecedents The Brazilian economy experienced growth for the first seventy years of the twentieth century. Initially sustained by the exportation of coffee and later by a process of induced industrialization through the substitution of imports, the country created an ample and complex industrial structure without parallel in Latin America. By the late 1970s, Brazil had established an industrial structure that included an important capital goods sector. The continental size of the country created a market of a scale sufficient to sustain not only a consumer durable goods industry but also one that could produce both basic inputs and finished capital goods. This long process of growth was broken by a series of external crises that affected Brazil and the majority of the developing countries at the end of the decade of the 1970s. The crisis began to unfold with the first oil shock of 1973, was reenforced by the second one of 1979, and was followed by the External Debt Crisis of the 1980s. These shocks, for both Brazil and the rest of Latin America, broke their long trend of growth in the twentieth century. In the case of Brazil, the average rate of growth, which had been 5.7 percent per annum by the last years of the 1970s, dropped to 2.1 percent in the last twenty years of the century. [ABSTRACT FROM AUTHOR]

In few areas was Brazil so far behind the rest of the hemisphere and even comparable third world countries than in education and in few areas has more changed in the past quarter century. Brazil, for most of its imperial and Republican history, was a relatively backward nation in terms of providing public education for its population. Although the goals of a free primary education had been enunciated as early as the 1820s, the government made little effort to carry out this fundamental task. This failure was due to a series of factors, among which was an ongoing debate about whether the central government or the state and municipal regimes were primarily responsible for providing education. This resulted in few governments spending significant sums on education. The independent empire of Brazil inherited a colonial tradition that was antithetical to higher education and even to the printing of books. In the Spanish American empire, local universities were created in all the major capitals, and the printing of religious works, Indian grammars, and government documents was the norm from Mexico City to Lima from the sixteenth century onward. In contrast, the Portuguese colonial administration rejected the idea of creating local universities in its American colony and prohibited the printing of books altogether. The Portuguese crown primarily encouraged private religious primary and secondary education in the colonial period and forced the elite to return to Europe to get a higher degree at the major Portuguese universities. [ABSTRACT FROM AUTHOR]

Without question, among the most profound structural changes in the national economy in the past half century has been the creation of a national credit market. For all the early initial development of the financial sector, Brazil in the past quarter century has finally created one of the most sophisticated financial markets in any developing country in the world. It did so amid the shocks of hyperinflation, debt crises, moratoriums, and the entrance of foreign capital institutions. Also, much of the early restructuring of this financial market was at the cost of the public sector, which by the end of the twentieth century finally was able to remove itself from the highly costly subvention, leaving a strong system in place. Although profound problems remain with the ability of the financial sector to provide medium- and long-term private credit and the excessive spread that it obtained in its operations, the financial sector has emerged as a highly liquid, modernized, and technologically advanced system. When the military seized the government in 1964, the economic authorities identified limitations in the financial sector, which needed to be resolved for the implementation of the ambitious stability and growth program they wished to develop. There was a lack of effective management instruments for an appropriate monetary and credit policy. The legal structure was obsolete, the country lacked a Central Bank, and, in spite of the growing inflation, the usury laws still limited interest rates. [ABSTRACT FROM AUTHOR]

Brazil today is the fifth largest nation in the world in terms of population and the size of its territory. It has the most advanced industrial base in Latin America and has become one of the world's most important agricultural producers. Much of what Brazil is today is the result of major transformations that have occurred only in the past quarter century. In 1980, it ranked poorly even among most Latin American countries in terms of the health and education of its population, it contained one of the region's poorest and most backward rural sectors, and it maintained a large but closed economy. Its primary exports were unprocessed raw materials, its industries, although quite important, produced only for the national market, and its political institutions were extremely fragile after passing through one of the longest periods of military rule in Latin American history. In the past quarter century, Brazil has undergone profound social, economic, and political changes. For the first time in its Republican history, it has established a vibrant and functioning democratic system, free from military tutelage and the populist politicians who had created such profound instability in the previous century of republican rule. It was in this period that Brazil fortified its position in the world economy by becoming one of the largest international exporters of numerous agricultural products on the level of Canada, the United States, and Australia. [ABSTRACT FROM AUTHOR]

Introduction This chapter is concerned with the development of the financial sector and the availability of close money substitutes in pre-1914 Britain. The financial sector is important to economic historians for a number of reasons. Firstly it is widely believed that an adequate financial system is a necessary, but not a sufficient, condition for the process of industrialisation and growth. The late Victorian/early Edwardian periods are frequently characterised as years of relative economic decline. It is therefore interesting to examine to what extent this might be explained by the failure of suitable financial instruments to develop. For example, this could be the case if the institutions which were capable of channelling small savings failed to develop, thus reducing the savings rate and lowering capital growth. A second source of interest derives from one of the great policy debates of the early nineteenth century, that between the Currency and Banking schools. Collins (1978) has argued that the central proposition of the Banking school was that expansion of the stock of close money substitutes would frustrate any attempts to enforce strict monetary discipline. Thus the extent to which such substitutes were available is of interest. Finally a number of studies of the macroeconomics of the Victorian era have made use of the demand for money function as a central part of the analysis. The best-known example of this is McCloskey and Zecher's (1976) analysis of the pre-1914 gold standard. It is therefore important to assess to what extent the correct monetary aggregate has been chosen and whether or not the functions used are adequately specified. [ABSTRACT FROM AUTHOR]