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Understanding the Brazilian demand regime: a Kaleckian approach

Author

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  • Bruno Thiago Tomio

    (University of Blumenau (FURB), Brazil and University of Grenoble Aples, France)

Abstract

The empirical literature on Kaleckian growth and distribution models consists almost exclusively of studies of developed countries. These studies have used varied econometric techniques and estimation methods, but little attention has been given to developing countries. Onaran and Galanis (2013) provide an extensive review of this literature, and they complement it by estimating models for some developing countries. However, owing to lack of data they were unable to estimate their model for Brazil. This paper expands the empirical literature by applying it to Brazil. The Brazilian demand regime is analysed for the period of 1956–2008, using functional distribution of income data supplied by Adalmir Marquetti (which was developed in a paper by Marquetti et al. 2010). The paper estimates the open-economy Bhaduri–Marglin model using the single-equation technique outlined in Hein and Vogel (2008). The results of the estimation show that the demand regime in Brazil is wage-led domestically despite being an open economy. Consequently, increases in the profit share tend to diminish demand. The paper concludes with some policy implications of the findings.

Suggested Citation

  • Bruno Thiago Tomio, 2020. "Understanding the Brazilian demand regime: a Kaleckian approach," Review of Keynesian Economics, Edward Elgar Publishing, vol. 8(2), pages 287-302, April.
    • Handle: RePEc:elg:rokejn:v:8:y:2020:i:2:p287-302
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    Cited by:

    1. Jiménez, Valeria, 2020. "Wage shares and demand regimes in Central America: An empirical analysis for Costa Rica, El Salvador, Honduras, Nicaragua, and Panama, 1970-2016," IPE Working Papers 151/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Fernando Rugitsky, 2017. "The rise and fall of the Brazilian economy (2004-2015): the economic antimiracle," Working Papers, Department of Economics 2017_29, University of São Paulo (FEA-USP).
    3. Jungmann, Benjamin, 2021. "Growth drivers in emerging capitalist economies before and after the Global Financial Crisis," IPE Working Papers 172/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Benjamin Jungmann, 2023. "Growth drivers in emerging capitalist economies: building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis," Review of Evolutionary Political Economy, Springer, vol. 4(2), pages 349-386, July.
    5. Akcay, Ümit & Hein, Eckhard & Jungmann, Benjamin, 2021. "Financialisation and macroeconomic regimes in emerging capitalist economies before and after the Great Recession," IPE Working Papers 158/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    6. Betül Mutlugün, 2022. "Endogenous income distribution and aggregate demand: Empirical evidence from heterogeneous panel structural vector autoregression," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 583-637, May.
    7. Paul Carrillo‐Maldonado, 2023. "Partial identification for growth regimes: The case of Latin American countries," Metroeconomica, Wiley Blackwell, vol. 74(3), pages 557-583, July.

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    Keywords

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    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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