Growth of the Brazilian biofuel sector: an inter-temporal general equilibrium analysis

Cristina Vinyes and Terry Roe

No 332230, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In order to enhance energy security and independence, Brazil has supported the production and use of ethanol. Brazilís leadership in this market reveals complex inter-linkages between ethanol, sugarcane, sugar and fossil fuels. These sectors have been growing an average of 14% per year, while the countryís growth rates have been very modest. This paper presents a theoretical framework for understanding the interaction between Brazilís economic growth and the evolution of these sectors as the economy transitions toward long-run equilibrium. Then, the sensitivity of these results is analyzed under two simulations; Örst, a reduction of the cost of Önancial intermediation (which the literature identiÖes as one of the factors a§ecting Brazilís growth), and second, an increase in ethanol prices by 2.6%, based on the expectation that biofuelsíworld demand is increasing.

Keywords: Resource/Energy Economics and Policy; Production Economics (search for similar items in EconPapers)
Pages: 55
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332230

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