Currency Crisis or Overproduction? A Marxian Analysis of the Exchange Rate Peg Collapse in Brazil

Abstract

We revisit the recent past of the Brazilian economy in an attempt to present an alternative characterization of the nature of the late 1990s crisis. The theoretical basis of this analysis is Marxian political economy. This choice is justified by the contraposition between the Marxian theory of overproduction cyclical crisis and the most popular currency crisis theories, revealing that while the latter focus on the phenomenon’s appearance, the former analyzes it in depth. The analysis of capital accumulation during Brazil’s Real Plan shows that the examined crisis can be characterized as another manifestation of the aforementioned phenomenon: the overproduction cyclical crisis. JEL Classification: B51, E32, N16