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The impact of Petrobras spending on economic cycles

Author

Listed:
  • Edmundo Inacio

    (University of Campinas (UNICAMP))

  • Cassio Garcia Ribeiro

    (Federal University of Uberlândia (UFU))

  • Carolina Troncoso Baltar

    (University of Campinas (UNICAMP))

  • Rosangela Ballini

    (University of Campinas (UNICAMP))

  • Yanchao Li

    (Energy and Extractives Global Practice Specialist)

Abstract

Public spending influences a country’s economic activities due to its effect on aggregate demand. Although existing research has focused on government expenditures to understand the multiplier impacts of public spending, there is scant literature focusing on the spending of state-owned enterprises (SOEs), especially in strategic sectors such as the oil sector. This study analyzes the spending behaviour of an important Brazilian SOE, Petrobras, to understand its consequences to the Brazilian economic activity. The results suggest that multiplier impacts during recessions are bigger than those during economic expansions. The accumulated multiplier of Petrobras’s investment expenditures is higher compared to current spending, especially in periods of recession. Moreover, the forecast error variance decomposition showed the impact that changes in government spending in Petrobras had on the Brazilian GDP growth in periods of expansion and contraction.

Suggested Citation

  • Edmundo Inacio & Cassio Garcia Ribeiro & Carolina Troncoso Baltar & Rosangela Ballini & Yanchao Li, 2024. "The impact of Petrobras spending on economic cycles," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 23(3), pages 459-485, September.
    • Handle: RePEc:spr:portec:v:23:y:2024:i:3:d:10.1007_s10258-023-00241-6
    DOI: 10.1007/s10258-023-00241-6
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    More about this item

    Keywords

    Petrobras; Multipliers; Non-linear model; Time series; MS-VAR;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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