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Capital Accumulation, External Restriction, Technology Gap and Structural Change: Theory and the Brazilian Experience


  • José Luis Oreiro

    () (Departamento de Economia (Department of Economics) Faculdade de Economia, Administração, Contabilidade e Ciência da Informação e Documentação (FACE) (Faculty of Economics, Administration, Accounting and Information Science) Universidade de Brasília)

  • Marcos Tostes Lamônica

    (Economics Department, Fluminense Federal University (UFF).)

  • Carmem Aparecida Feijo

    (Economics Department, Fluminense Federal University (UFF).)


Brazilian economy was the most dynamic in terms of growth among developed and developing economies from post-War until 1980, when a severe external constraint interrupted this trend. We propose in this paper a model, based on Kaldor, where capital accumulation, technological gap and long run external constraint are connected. Our hypothesis is that capital accumulation, under certain circumstances, can overcome external constraint if the accumulation effort promotes structural change increasing the importance of sectors more technological-intensive. It is expected that the structural change in this direction will contribute to an increase in the income-elasticity of exports and to a decrease in income-elasticity of imports, resulting in the increase in the growth rate of real product compatible with the balance of payments equilibrium in the long period. The last part of the paper shows that the high investment rate observed in the Brazilian economy from the post-War until the end of the 1970s resulted in the deepening of the import substitution process, what, in our interpretation, contributed to partially increase the long run growth rate of the Brazilian economy compatible with the balance of payment equilibrium.

Suggested Citation

  • José Luis Oreiro & Marcos Tostes Lamônica & Carmem Aparecida Feijo, 2011. "Capital Accumulation, External Restriction, Technology Gap and Structural Change: Theory and the Brazilian Experience," Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia 355, Departamento de Economia da Universidade de Brasilia.
  • Handle: RePEc:brs:wpaper:355

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    References listed on IDEAS

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    More about this item


    structural change; technological progress; industrialization; external restriction;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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