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Income Distributive Effects in the Brazilian Economy

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  • Jose Euclides Cavalcanti

Abstract

Studies aiming to evaluate the structural distribution of economic impacts usually treat consumption demand as an exogenous variable. In this case, the Leontief matrix multiplier lacks the multiplier process via the consumption function that one customarily finds in a Keynesian model. To regard the consumption as a fictitious production activity is not the appropriate procedure. Instead, the Keynesian consumption function is introduced at a disaggregated level. For that, a matrix multiplier was formulated in order to combine Leontief's propagation process with the Keynesian propagation process. This matrix includes the effects of endogenous changes in consumption demand. Based on the present production structure in Brazil, the results show how the propagation effect directs the induced income towards capitalists, depriving wage earners. The model also allows for evaluation of diverse effects of the propagation process according to income and consumption coefficients by sector.

Suggested Citation

  • Jose Euclides Cavalcanti, 2001. "Income Distributive Effects in the Brazilian Economy," Economic Systems Research, Taylor & Francis Journals, vol. 13(3), pages 275-287.
  • Handle: RePEc:taf:ecsysr:v:13:y:2001:i:3:p:275-287
    DOI: 10.1080/09537320120070158
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    Cited by:

    1. Moreira, Guilherme Renato Caldo & Ichihara, Silvio Massaru & Guilhoto, Joaquim José Martins, 2007. "O impacto do aumento das exportações de álcool sobre a distribuição de renda do Brasil [The impact of the increased exports of ethanol on the distribution of income of the Brazil]," MPRA Paper 31517, University Library of Munich, Germany.

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