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Growth, Distribution, and External Constraints: A Post-Kaleckian Model Applied to Brazil

Douglas Alencar, Frederico G. Jayme and Gustavo Britto

Review of Political Economy, 2021, vol. 33, issue 1, 44-66

Abstract: The purpose of this research is to analyze whether the Brazilian economy behaved under a wage-led or profit-led regime between 1960 and 2011, considering a Post-Kaleckian model in a context of external constraints. The time span is limited by data availability (i.e., 2011). To answer the question of whether the Brazilian economy works under a wage-led or profit-led regime, we propose a simple Post-Kaleckian model. The model suggests that a profit-led regime is more probable for Brazil. Moreover, a wage-led regime occurs when a balance of payments constrained growth model is taken into consideration. Likewise, the real exchange rate has a positive impact on economic growth through the export channel. This result is a novelty in the recent literature about the relationship between real exchange rate and economic growth within a Post-Kaleckian model. The Brazilian economy was chosen as it is one of the biggest economies in Latin America.

Date: 2021
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DOI: 10.1080/09538259.2020.1720149

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