Impacts of Reallocation of Resource Constraints on the Northeast Economy of Brazil
AbstractThe present paper explores the role of water and energy resource constraints and allocation on the Northeast Brazil economy. The analysis centered on the creation of an intergrated model in which an econometric-input-output model was linked with a linear programming optimization model for resource allocation. Over the period 1999-2012, the impact on the six agricultural sectors was to reduce their output and employment by 15% annually. The reduction in employment in the rest of the economy was a little over 1% annually. However, since the agricultural sectors continue to employ a significant percentage of the labor force, the aggregate loss of employment amounted to 6% of the total regional employment on average, translating into 1 million jobs annually. When water allocation and energy resource allocations are considered simultaneously, the re-allocations are more limited, resulting in a loss of 0.78 million jobs annually. These results suggest the need for an active link between policy making and economic development when resource constraints are present. Some balance has to be provided between allocation and reallocation on the one hand perhaps driven by concerns with economic efficiency against anticipated losses of employment for part of the labor force with few other alternatives.
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Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p14.
Date of creation: Aug 2005
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Other versions of this item:
- Hewings, Geoffrey J.D. & Dridi, Chokri & Guilhoto, Joaquim J.M., 2005. "Impacts of reallocation of resource constraints on the northeast economy of Brazil," MPRA Paper 38210, University Library of Munich, Germany.
- D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-05 (All new papers)
- NEP-ENE-2006-02-05 (Energy Economics)
- NEP-GEO-2006-02-05 (Economic Geography)
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