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Article Artículo

Brazil

Globalization and Trade

Latin America and the Caribbean

World

Was Snowden’s Letter to Brazil a Quid-Pro-Quo Offer?

NSA whistle-blower Edward Snowden’s “Open Letter to the People of Brazil” made headlines this week, with many U.S. and international media outlets characterizing it as a quid-pro-quo offer of help investigating NSA surveillance in Brazil in return for asylum. In an article about the letter, Folha de Sao Paulo – which also first published the letter -- stated, “US espionage whistleblower Edward Snowden has promised to cooperate with investigations into the actions of the National Security Agency (NSA) in Brazil. In order to do so, he wants political asylum from Dilma Rousseff's government in return.”

“Snowden to Brazil: Swap you spying help for asylum,” read a USA Today headline for a story about the letter (even though the article stated midway-through that “It was not entirely clear from the letter whether Snowden was suggesting that the South American nation should grant him asylum in return for help in probing claims that the U.S. has spied on Brazil”). The Financial Times ran a similar headline: “Edward Snowden offers Brazil help on spying in return for asylum.” CNN reported that Snowden was offering “a deal”: “Help fighting NSA surveillance in exchange for political asylum.”

But in his letter, Snowden does not make his offer of assistance contingent on the asylum. He points out that the U.S. government has constrained his ability to travel, and will do so “[u]ntil a country grants permanent political asylum.”

It is also clear that Snowden is responding, in part, to requests from Brazilian senators for help in investigating U.S. spying in Brazil, which he says he is unable to do while in Russia. As Folha reported:

"Many Brazilian senators have asked my help with their investigations into suspected crimes against Brazilian citizens. I expressed my willingness to assist, where it is appropriate and legal, but unfortunately the US government has been working very hard to limit my ability to do so," said the letter.

Snowden was referring to an open [Parliamentary Committee of Inquiry] in the Senate to investigate the activities of the NSA in Brazil, which included monitoring the phone calls and emails of both Dilma and Petrobras.

CEPR / December 19, 2013

Article Artículo

Economic Growth

Government

Have Economists Underestimated the Impact of Fiscal Stimulus?

The effects of fiscal policy on growth and employment are central to the debate on deficit reduction and stimulus. Unfortunately, there are sharp divisions among economists over the size of fiscal multipliers.

A major problem is identifying deliberate changes in fiscal policy, since the size of the budget deficit is in large part dependent on the state of the economy. Therefore it is necessary to find a way to distinguish between changes in the deficit that are the result of cyclical fluctuations and changes that are attributable to conscious policy.

Several identification schemes have been used to resolve the issue of endogeneity regarding the business cycle in fiscal multiplier estimations, among them a measure of the cyclically adjusted budget deficit, the cyclically adjusted primary balance (CAPB) in event studies (Alesina and Ardagna 2010), as well as the recursive approach (Fatás and Mihov 2001) and the one by Blanchard and Perotti (2002) in structural vector autoregressive (SVAR) models. However, adjusting for business cycle movements may not be enough in the presence of pronounced asset and credit market movements that influence the budget and GDP over and above what is generally recognized as business cycle swings.

Dean Baker, Sebastian Gechert, Rafael Mentges and / December 18, 2013