Investment and Capital Accumulation in Brazil from 1970 to 2000: A Neoclassical View
AbstractIn this paper we study the behavior of aggregate investment in the Brazilian economy from 1970-1998. There are two periods when investment has a big increment in Brazil. The second half of the 70s, when investment grew faster than before mainly due to the increment of public investment (government plus public enterprises). The second is the second half of the 80s. In this second case it goes up mainly as a result of the increment of relative price of capital. This is in clear contradiction with the neoclassical growth model (Cass-Koopmans) since in the 70s as well as in the he 80s the technological progress (measure by the growth rate of TFP) is declining or even getting negative. Once the investment series is adjust for this government behavior as well as the relative price changes, the neoclassical theory is able to fairly describe the investment behavior, hence the Brazilian capital accumulation dynamics during the period under study.
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Bibliographic InfoPaper provided by Departamento de Economia da Universidade de Brasilia in its series Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia with number 316.
Length: 27 pages
Date of creation: Jun 2004
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Other versions of this item:
- Roberto Ellery Jr & Mirta Bugarin & Victor Gomes & Arilton Teixeira, 2003. "Investment and Capital Accumulation in Brazil From 1970 To 2000: a Neoclassical View," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] b20, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
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