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From a Miracle to a Disaster: the Brazilian Economy in the 3 last Decades

Author

Listed:
  • Arilton Teixeira

    (FUCAPE Business School)

  • Mirta N. S. Bugarin
  • Roberto Ellery Jr.
  • Victor Gomes

Abstract

In the beginning of the eighties the Brazilian growth rate of per capita GDP fell abruptly. In this paper we ask if this fall can be ex-plained by the behavior of technological progress (measured by Total Factor Productivity or TFP). Our main conclusion is that the behavior of TFP can fairly describe the dynamics of the Brazilian economy between 1970 and 1998. We divide this period in two sub-periods. In the first, the seventies, per capita GDP grew at 5.05% a year. In contrast with per capita GDP, TFP grew only until 1974, declining in the rest of the decade. After 1974, the growth rate of per capita GDP was sustained by increasing investment sustained by government subsidies that went from 1% to 4% of GDP in the second half of the seventies. In the second sub-period, the eighties and nineties, both TFP and per capita GDP decreased until 1993, increasing thereafter.

Suggested Citation

  • Arilton Teixeira & Mirta N. S. Bugarin & Roberto Ellery Jr. & Victor Gomes, 2009. "From a Miracle to a Disaster: the Brazilian Economy in the 3 last Decades," Fucape Working Papers 20, Fucape Business School.
    • Handle: RePEc:bbz:fcpwps:20
    as

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    File URL: http://www.fucape.br/_public/workingpapers/20-2009.pdf
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    References listed on IDEAS

    as
    1. James A. Schmitz, Jr. & Arilton Teixeira, 2008. "Privatization's Impact on Private Productivity: The Case of Brazilian Iron Ore," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 745-760, October.
    2. Pritchett, Lant, 2000. "The Tyranny of Concepts: CUDIE (Cumulated, Depreciated, Investment Effort) Is Not Capital," Journal of Economic Growth, Springer, vol. 5(4), pages 361-384, December.
    3. Marc-Andreas Muendler, 2004. "Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986-1998," CESifo Working Paper Series 1148, CESifo.
    4. Mirta N.S. Bugarin & Roberto Ellery Jr & Victor Gomes & Arilton Teixeira, 2002. "The Brazilian Depression in the 1980s and 1990s," Computing in Economics and Finance 2002 338, Society for Computational Economics.
    5. Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
    6. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
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    Cited by:

    1. Bridgman, Benjamin & Gomes, Victor & Teixeira, Arilton, 2011. "Threatening to Increase Productivity: Evidence from Brazil's Oil Industry," World Development, Elsevier, vol. 39(8), pages 1372-1385, August.

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