Exchange Rate and Employment: Brazil after the Real Plan

Abstract

This study aims to verify the possible relationship between exchange rate appreciation and employment in Brazil – from the launch of the Real Plan to 2007. For that, knowledge of interest rate behavior, tax policy and shortterm objectives of the government’s economic policy is necessary. The current appreciation of the Brazilian Real against the American Dollar, considered by many economics analysts as excessive and harmful to the development of the industrial sector, characterizes a controversial discussion, not only in the academia, but also in the institutions that represent several national productive sectors which keep commercial relations with other countries. This study shows statistical data that allow a highly objective analysis of the issue.