A model of economic growth for an open emerging country: empirical evidence for Brazil
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Publication Date
2019Journal Title
Structural Change and Economic Dynamics
ISSN
0954-349X
Publisher
Elsevier BV
Volume
49
Pages
217-227
Type
Article
This Version
AM
Metadata
Show full item recordCitation
Arestis, P., & Baltar, C. (2019). A model of economic growth for an open emerging country: empirical evidence for Brazil. Structural Change and Economic Dynamics, 49 217-227. https://doi.org/10.1016/j.strueco.2018.10.005
Abstract
Brazil liberalised its trade and finance in the 1990s as a strategy for higher economic growth. However, the country’s GDP growth has been unstable and low compared to its own performance during the industrialization period. This paper builds a model of economic growth that accounts for the main components of effective demand as well as important specificities of emerging economies to explain the economic dynamics after the liberalising reforms. The model is estimated for the case of Brazil from 1990 to 2014 and the results suggest that this economy became highly dependent on the world economic growth and the evolution of the real exchange rate. The main finding is that Brazil experiences higher economic growth only in favourable world scenarios but the evolution of the real exchange rate in this scenario may stimulate investments that only reinforce the existing productive structure, affecting negatively the long-run economic growth.
Keywords
Economic growth, Effective demand, Real exchange rate
Sponsorship
Carolina Troncoso Baltar is very grateful to “Coordenação de Aperfeiçoamento de Pessoal de Nível Superior” (CAPES) for financial support.
Identifiers
External DOI: https://doi.org/10.1016/j.strueco.2018.10.005
This record's URL: https://www.repository.cam.ac.uk/handle/1810/286697
Rights
Licence:
http://creativecommons.org/licenses/by-nc-nd/4.0/
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