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The rise and fall of the Brazilian economy (2004-2015): the economic antimiracle

Fernando Rugitsky ()

No 2017_29, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: The aim of this paper is to interpret the recent trajectory of the Brazilian economy, from around 2004 to 2015, focusing on the interaction between demand, income distribution, and the productive structure. An interpretative hypothesis is formulated within a framework that combines an effective demand schedule from the Kaleckian growth and distribution literature and a distributive schedule of Goodwin heritage (following Taylor, 2004, and Barbosa-Filho and Taylor, 2006). Such hypothesis indicates the determinants of the growth acceleration and of the increase of the wage share on income that started around 2004, as well as the determinants of their later reversal. Then, the framework is modified to incorporate sectoral heterogeneity, as suggested by Rugitsky (2016), and a modified hypothesis points out that a cumulative process involving reductions of wage inequality and changes of the productive structure may explain part of the recent Brazilian trajectory. Both hypotheses are examined empirically. The contrast of the cumulative process suggested with the one that seems to have taken place during Brazil’s “economic miracle” (1968-1973) allows it to be called an economic antimiracle.

Keywords: aggregate demand; income distribution; productive structure; Kalecki; Goodwin; Brazilian economy (search for similar items in EconPapers)
JEL-codes: E11 N16 O11 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pke
Date: 2017-11-14
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