Capital formation and transfer of funds abroad

Paulo Nogueira Batista ()

Brazilian Journal of Political Economy, 1987, vol. 7, issue 1, 8-26

Abstract: This paper analyses the implication of the increasing transfer of resources toexternal sector on the capacity of investment of the Brazilian economy. After 1983 Brazilianeconomy is transferring an increasing volume of resources which attained more than 5%of the GDP in the last two years, contrasting with the decade of 70 when the absorption ofexternal saving attained about 2% of the GCP. As a consequence of this external constraint,the rate of investment has dropped from 26% of GDP in the 70’s to an estimated level of16% in the last years. The paper, using a standard macroeconomic model, establishes therelationship between alternatives rates of transfer of resources, rate of domestic savings, andcapital-output ratio with the target rate of growth of the Brazilian economy. JEL Classification: F32; F37; F38.

Keywords: Capital flows; debt crisis; balance of payments (search for similar items in EconPapers)
Date: 1987
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