Productive relations in the northeast and the rest of Brazil regions in 1995: decomposition & synergy in input-output systems

Using a set of interregional input-output tables built by Guilhoto (1998) for 1995 for two Brazilian regions (Northeast and rest of the economy), the methodology developed by Sonis et al. (1997) is applied in the construction of a series of linkages such that it is possible to examine, through the nature of the internal and external interdependencies, the structure of trading relationships between the two regions. The methodology uses a partitioned input-output system and exploits techniques that produce left and right matrix multipliers of the Leontief Inverse. This procedure facilitates the classification of the types of synergetic interactions within a preset pair-wise hierarchy of economic linkages subsystems. In general, the results show that the Northeast region has a greater dependence on the rest of the economy region than the rest of the economy has on the Northeast region, and at the same time the rest of the economy region seems to be more developed as it presents a more complex productive structure than the Northeast region.