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The central focus is on the testing of the causes and effects of export earnings instability in Brazil, 1953-1983. While Brazil has been included in some cross-sectional studies of fluctuations in export earnings, it has not been the subject of a case study, as is provided here. We test the traditional theory which stipulates that increased diversification of exports will decrease export earnings instability, and that in turn, a decrease in export earnings instability will enhance economic growth. While we do find that export diversification in Brazil did result in lower export earnings instability, the lower export earnings instability did not in turn stimulate economic growth. Our results indicate that the export earnings instability of manufactured goods was positively associated with the growth rate of Brazil's Gross National Product. The results of this case study may prove relevant to other developing countries striving to emulate the Brazilian success in diversifying into manufactured exports.