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Economic growth, income distribution, and financial system: an analysis based on financial social accounting matrices for the brazilian economy

Author

Listed:
  • Juliana Rodrigues Vieira

    (BDMG)

  • Gilberto de Assis Libânio

    (UFMG)

  • Débora Freire Cardoso

    (UFMG)

Abstract

This study analyzes the relationship between income distribution, economic growth, and the financial system for the Brazilian economy from 2005 to 2017. Our main goal is to investigate the role of the financial sector in explaining economic growth and the distributive structure. In terms of methodology, this work is based on the social accounting model, via the estimation of social accounting multipliers. These were obtained from financial social accounting matrices for the years 2005, 2008 and 2017. Our results suggest that the financial sector has contributed to economic growth and agents’ income. However, it has also brought about negative effects on income distribution, due to the unequal access to financial products across income deciles – which highlights the importance of policies aimed at facilitating access to the financial sector by lower income individuals.

Suggested Citation

  • Juliana Rodrigues Vieira & Gilberto de Assis Libânio & Débora Freire Cardoso, 2023. "Economic growth, income distribution, and financial system: an analysis based on financial social accounting matrices for the brazilian economy," Textos para Discussão Cedeplar-UFMG 664, Cedeplar, Universidade Federal de Minas Gerais.
    • Handle: RePEc:cdp:texdis:td664
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    File URL: https://www.cedeplar.ufmg.br/pesquisas/td/TD%20664.pdf
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    References listed on IDEAS

    as
    1. Oliver Denk & Boris Cournède, 2015. "Finance and income inequality in OECD countries," OECD Economics Department Working Papers 1224, OECD Publishing.
    2. George R. G. Clarke & Lixin Colin Xu & Heng‐fu Zou, 2006. "Finance and Income Inequality: What Do the Data Tell Us?," Southern Economic Journal, John Wiley & Sons, vol. 72(3), pages 578-596, January.
    3. Amela Hubic, 2012. "A Financial Social Accounting Matrix (SAM) for Luxembourg," BCL working papers 72, Central Bank of Luxembourg.
    4. Wong, Kai Seng Kelly & M., Azali & Lee, Chin, 2009. "Financial Social Accounting Matrix: Concepts, Constructions and Theoretical Framework," MPRA Paper 14757, University Library of Munich, Germany.
    5. Paulo Baltar, 2015. "Crescimento da Economia e Mercado de Trabalho no Brasil," Discussion Papers 2036, Instituto de Pesquisa Econômica Aplicada - IPEA.
    6. Henry Aray & Luis Pedauga & Agustín Velázquez, 2017. "Financial Social Accounting Matrix: a useful tool for understanding the macro-financial linkages of an economy," Economic Systems Research, Taylor & Francis Journals, vol. 29(4), pages 486-508, October.
    7. Araújo, Eliane & Bruno, Miguel & Pimentel, Débora, 2012. "Financialization against Industrialization: a regulationnist approach of the Brazilian Paradox," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 11.
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    More about this item

    Keywords

    income distribution; economic growth; financial system;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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