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The Long Expansion and the Profit Squeeze: Output and Profit Cycles in Brazil (1996–2016)

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  • Guilherme Klein Martins
  • Fernando Rugitsky

Abstract

The present paper argues that the recent Brazilian crisis was related to a cyclical profit squeeze that took place between 2009 and 2014, following the long expansion that started in 2003. To do so, the cyclical trajectories of the output and the profit rate in the Brazilian economy for the period between 1996 and 2016 are examined by resorting to the framework established by Weisskopf (1979). The results indicate that profit squeezes are rare in the Brazilian economy, possibly due to the truncated character of the business cycles’ expansions. However, a profit squeeze did take place in the last cycle, partly as a result of the commodities boom, which attenuated the foreign vulnerability of the economy and allowed for a longer than usual expansion. JEL classification: B50, B51,E32

Suggested Citation

  • Guilherme Klein Martins & Fernando Rugitsky, 2021. "The Long Expansion and the Profit Squeeze: Output and Profit Cycles in Brazil (1996–2016)," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(3), pages 373-397, September.
    • Handle: RePEc:sae:reorpe:v:53:y:2021:i:3:p:373-397
    DOI: 10.1177/0486613420982083
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    2. Henrique Morrone & Adalmir Antonio Marquetti & Alessandro Donadio Miebach, 2023. "Productive and Unproductive Sectors’ Interactions in Brazil: A Miyazawa Analysis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(2), pages 251-268, June.

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    More about this item

    Keywords

    cyclical profit squeeze; Brazilian economy; profit rate decomposition; Weisskopf; structuralist Goodwin model;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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