Abstract
This paper builds on previous work on the relationships that exist between the Brazilian state and financial markets. On this occasion we seek to ascertain whether equity market participants have come to see Brazil as exhibiting the characteristics of a developed nation and as having a position of regional leadership. Financial markets are important in both the exercise of hegemony and in signalling its existence. The data presented examines two periods, 1990-1995 and 2005-2010 and demonstrates that attitudes towards Brazil in the equity markets altered considerably in the intervening period. Using a cointegration analysis we empirically demonstrate the ‘normalisation’ of Brazil and an implicit acceptance of its leadership role.
