Brazil Responses to the Global Financial Crisis: a well succeed example of Keynesian policies? André Moreira Cunha 1 Daniela Magalhães Prates 2 and Fernando Ferrari-Filho 3 Introduction This paper analyses the policy responses of the Brazilian government to the contagion effect of the global financial crisis. Despite the recession in 2009 – the Brazilian GDP decreased 0.6% –, on the contrary to previous experiences, Brazil‟s economic recovery was strong in 2010 – according to the IBGE (2011), the GDP increased 7.5% – and, as result of, it was one of the less affected economies, showing a remarkable resilience. In this context we speculate about how Keynesian has been the Brazilian recovery. We consider that Brazil has experienced a period of transition, where the return of Keynesian policy elements has not been strong enough to overcome previous neoliberal tendencies. Otherwise it has opened new future possibilities, which might be explored by the new elected government. We structured our arguments in four parts. After this brief Introduction we present the theoretical analysis of the Keynesian economic policies for monetary economies in a context of globalization with financial dominance 4 . In the third part we show Brazilian economic performance before and after the global financial crisis, emphasizing post-crisis government reaction. The final section summarizes our arguments in order to answer our main question. 2. Keynesian economic policies for coordinating the dynamics of monetary economies in a global world In The General Theory of Employment, Interest and Money (General Theory) Keynes proposed a new social philosophy in order to address the fact that “[t]he outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes” (Keynes, 1964: 372). The focus of his proposal was the power that the State should hold to steer the economic system, given that, if left to the free workings of market, the economic system and economic policies themselves – unless there was coordination among them – would contribute not to solving, but to enlarging the main problems of monetary production economies. 1 Departament of Economics, UFRGS – Brazil (http://www.ppge.ufrgs.br); CNPq Researcher. E-mail: andre.cunha@ufrgs.br. 2 Departament of Economics, Unicamp – Brazil (http://www.unicamp.br); CNPq Researcher. E-mail: daniprates@eco.unicamp.br. 3 Departament of Economics, UFRGS – Brazil (http://www.ppge.ufrgs.br); CNPq Researcher. Vice-President of the Brazilian Keynesian Association (http://www.ppge.ufrgs.br/akb). E-mail: ferrari@ufrgs.br. 4 See: Davidson (2004); Arestis and De Paula (2008).