From Miracle to Disaster: the Brazilian Economy in the Last 3 Decades
In this paper we ask if the Cass-Koopmans model can account for the behavior of the Brazilian economy from 1970 to 1998. We divide this period in two subperiods. In the first one, the 70s, the GNP per working age person grew at 5.05% a year. In contrast with GNP per working age person, Total Factor Productivity (TFP) grows only until 1974, declining in the rest of the decade. After 1974 the growth rate of GNP per Working age person was sustained through an increasing investment share of GNP due to the increment in the public (government plus state owned enterprize) and in the private investment. To increase private investment with a declining TFP, government subsidies to the private sector goes from 1% of GNP to 4% in the second half of the 70s. In the second subperiod, the 80s and 90s, TFP as well as GNP per working age person decrease until 1993, increasing since. Here we also find in the second half of the 80s that investment share is increasing while TFP is decreasing. In this second case it goes up mainly as a result of the increment of price of capital relative to consumption. Once the investment series is adjust for this government behavior as well as the relative price changes, the neoclassical theory is able to fairly describe the investment behavior, hence the dynamics of the Brazilian economy during the period under study.
|Date of creation:||Jun 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Niels Bohrs Vej 9, 6700 Esbjerg|
Phone: +45 6550 2233
Fax: +45 6550 1090
Web page: http://degit.sam.sdu.dk/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mirta N.S. Bugarin & Roberto Ellery Jr & Victor Gomes & Arilton Teixeira, 2002. "The Brazilian Depression in the 1980s and 1990s," Computing in Economics and Finance 2002 338, Society for Computational Economics.
- Romain Wacziarg & Karen Horn Welch, 2003.
"Trade Liberalization and Growth: New Evidence,"
NBER Working Papers
10152, National Bureau of Economic Research, Inc.
- James A. Schmitz, 1997.
"Government production of investment goods and aggregate labor productivity,"
240, Federal Reserve Bank of Minneapolis.
- SchmitzJr, James A., 2001. "Government production of investment goods and aggregate labor productivity," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 163-187, February.
- Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
- Harold L. Cole & Lee E. Ohanian, 2001.
"New Deal policies and the persistence of the Great Depression: a general equilibrium analysis,"
597, Federal Reserve Bank of Minneapolis.
- Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
When requesting a correction, please mention this item's handle: RePEc:deg:conpap:c010_009. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Pedersen)
If references are entirely missing, you can add them using this form.