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Intervenção governamental, crescimento e bem-estar: efeitos da política de equalização das taxas de juros do crédito rural nas regiões brasileiras [Governmental intervention, growth and welfare: effects of the equalization policy of rural credit interest in Brazilian regions]

Débora Freire Cardoso, Erly Cardoso Teixeira, Angelo Gurgel () and Eduardo Rodrigues de Castro
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Débora Freire Cardoso: CEDEPLAR/UFMG
Erly Cardoso Teixeira: UFV
Eduardo Rodrigues de Castro: UFSCAR-Sorocaba

Nova Economia, 2014, vol. 24, issue 2, 363-388

Abstract: The paper’s overall objective is to evaluate the impacts of government spending with the Interest Rates Equalization (IRE) policy in the economic growth and welfare of the Five Brazilian macro-regions. Simulations were performed using the model, database and software of the General Equilibrium Analysis Project of the Brazilian Economy (PAEG). The results show that the IRE policy provides economic growth in the Midwest, Northeast, and South regions that are greater than the cost of the policy. Moreover, in the North and East regions there is a decrease in the GDP. For Brazil, the policy is cost-effective and offers a 34% return. Furthermore, all regions are benefiting in terms of welfare. We conclude that the IRE policy is efficient and contributes to reducing regional disparities.

Keywords: subsidies; economic growth; welfare; general equilibrium; Brazilian regions (search for similar items in EconPapers)
JEL-codes: H20 O40 Q18 R13 (search for similar items in EconPapers)
Date: 2014
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Handle: RePEc:nov:artigo:v:24:y:2014:i:2:p:363-388