8759 - Trade, Growth, and Inequality in Brazil, 1960-2010

This paper will review the evolution of the aggregate personal distribution of income in Brazil from the 1960s through 2010 in the context of the pace of economic growth and Brazil’s international trade performance over the period. Special consideration of the link of the recent increase in exports relative to other kinds of economic activity to improvements in the labor markets and changes in the distribution of income. The long period covered begins in 1960 and includes the stabilization, high-growth, debt-crisis, and high-inflation periods prior to the 1994 Real Plan. The paper also reviews the more recent periods of the Cardoso (1995-2002), da Silva (2003-2010), and Rousseff (since 2011) governments. The analysis will take into account trends and variations in a variety of economic and policy variables including in real economic performance, external economic and the rate of inflation. Starting from the finding that the successful Real Plan provided a significant change in the economic environment of Brazil, first in the area of inflation and the level of poverty in spite of initial weak external performance, and more recently in real economic performance and income distribution, the paper will assess the impact of a recent strong export position, driven by growth in China, on employment, poverty, and income distribution in Brazil and also what Brazil’s long-run position might be.

Keywords: Brazil, growth, income inequality, international trade, labor markets

Author: Smith, Russell (Washburn University, Ud States of Am / USA)


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