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Effects of Redistribution on Growth in Brazil: A GVAR Approach

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  • Luccas Assis Attílio

    (Federal University of Ouro Preto (UFOP))

Abstract

We evaluate the impact of income redistribution on the Brazilian GDP using a GVAR model with 33 economies from 1980Q1 to 2018Q4. We detect a significant impact of redistribution on the GDP, with investment contributing to the diffusion of the shock. We find that Brazilian redistributive policies affect the GDP of trade partners, mainly Latin American economies. Hence, we argue that redistribution provokes spillover effects. We also examine if external redistributive policies affect Brazil's GDP, and our estimates support this hypothesis. We created a new multiplier - the redistribution multiplier - and obtained values greater than two over time. Our research highlights the existence of spillover effects caused by redistributive policies and the importance of the international economy in the analysis. Redistribution policy effects are not enclosed to domestic borders.

Suggested Citation

  • Luccas Assis Attílio, 2025. "Effects of Redistribution on Growth in Brazil: A GVAR Approach," Open Economies Review, Springer, vol. 36(2), pages 577-605, April.
    • Handle: RePEc:kap:openec:v:36:y:2025:i:2:d:10.1007_s11079-024-09770-9
    DOI: 10.1007/s11079-024-09770-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Redistribution; Inequality; GDP; Spillover Effect; Latin America;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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