During the presidency of João Goulart, the economy was nearing a crisis, and the annual inflation rate reached 100%. After the 1964 coup d'état, the Brazilian military was more concerned with political control and left economic policy to a group of entrusted technocrats, led by Delfim Netto.

Delfim Netto originated the phrase "cake theory" in reference to this model: the cake had to grow before it could be distributed. Although the "cake" in Delfim Netto's metaphor did grow, it was highly unequally distributed. The government became directly involved in the economy, as it invested heavily in new highways, bridges, and railroads. Steel mills, petrochemical factories, hydroelectric power plants, and nuclear reactors were built by the large state-owned companies Eletrobras and Petrobras. To reduce the dependency on imported oil, ethanol industry was heavily promoted.

By 1980, 57% of Brazil's exports were industrial goods, compared with 20% in 1968. In this period, the annual GDP growth rate jumped from 9.8% per year in 1968 to 14% in 1973 and inflation rose from 19.46% in 1968 to 34.55% in 1974. To fuel its economic growth, Brazil needed more and more imported oil. The early years of the Brazilian Miracle had sustainable growth and borrowing. However, the 1973 oil crisis made the military government increasingly borrow from international lenders, and the debt became unmanageable. By the end of the decade, Brazil had the largest debt in the world: about $US92 billion. Economic growth definitely ended with the 1979 energy crisis, which led to years of recession and hyperinflation.