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Brazil was mired in a joint political and economic crisis in 2015-2016. The current debate is ample and different opinions have emerged to explain the roots of the crisis. On one hand, the crisis can be understood as a result of external factors such as the downturn in global commodity prices and the deterioration of external financial conditions. On the other hand, the crisis is perceived by many as a consequence of internal factors such as misleading policies implemented during the 2011-2015 period, the alleged de-industrialization process that has been taking place in the last decades and the ongoing Petrobras scandal (the largest state-own oil company). In an attempt to find the most feasible explanation of the crisis this paper will make an assessment of each of these arguments. The evidence suggests that the contraction in 2015 can be explained mainly as a result of some misleading economic policies implemented since 2011 as well as by the crisis surrounding Petrobras, more than adverse external conditions and turmoil in the industrial sector.

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Guevara Hincapie, Rafael Andres
The author holds a Bachelor´s Degree in Economics from Universidad de los Andes in Bogota Colombia and a Master´s Degree in International Development Economics from University of Applied Sciences, Berlin, Germany. In 2015 the author was awarded with complete scholarship from DAAD (German Exchange Service) to complete his master studies.

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