A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025)
ABSTRACT The article aimed to forecast the Brazilian economy’s growth potential in the 2016-2025 period, assuming the absence of changes in industrial policy. It is based on a formal growth model constrained by the balance of payments (BOP) developed by the authors and disaggregated into three secto...
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| Format: | Article |
| Language: | English |
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Universidade Federal do Rio de Janeiro
2021-04-01
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| Series: | Revista de Economia Contemporânea |
| Subjects: | |
| Online Access: | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1415-98482021000100201&tlng=en |
| _version_ | 1818745180125134848 |
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| author | Cryslãine Flavia da Silva Rodrigues André Luís Cabral de Lourenço |
| author_facet | Cryslãine Flavia da Silva Rodrigues André Luís Cabral de Lourenço |
| author_sort | Cryslãine Flavia da Silva Rodrigues |
| collection | DOAJ |
| description | ABSTRACT The article aimed to forecast the Brazilian economy’s growth potential in the 2016-2025 period, assuming the absence of changes in industrial policy. It is based on a formal growth model constrained by the balance of payments (BOP) developed by the authors and disaggregated into three sectors (farming, industry, and services). All its parameters were econometrically estimated, including those of the world economy relevant to the Brazilian economy’s performance. Assuming that the current macroeconomic management “tripod” was maintained in the country, the basic interest rate and exchange rate policy were calibrated to generate the maximum growth rate allowed by the external constraint compatible with the maintenance of inflation in target each year. Forecasts were also made about the performance of the three sectors’ key variables, resulting from such calibration. Forecasted potential GDP and productivity growth were low (even by recent historical standards) and decreasing over time, with slower growth in the industrial sector than in other ones. The results revealed the critical importance of the industrial sector for such performance, suggesting that an efficient industrial policy could significantly increase the Brazilian economy’s growth potential. |
| first_indexed | 2024-12-18T02:56:06Z |
| format | Article |
| id | doaj.art-1f03b8747c8b4afbb52c00b4c09a8636 |
| institution | Directory Open Access Journal |
| issn | 1980-5527 |
| language | English |
| last_indexed | 2024-12-18T02:56:06Z |
| publishDate | 2021-04-01 |
| publisher | Universidade Federal do Rio de Janeiro |
| record_format | Article |
| series | Revista de Economia Contemporânea |
| spelling | doaj.art-1f03b8747c8b4afbb52c00b4c09a86362022-12-21T21:23:21ZengUniversidade Federal do Rio de JaneiroRevista de Economia Contemporânea1980-55272021-04-0125110.1590/198055272512A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025)Cryslãine Flavia da Silva Rodrigueshttps://orcid.org/0000-0002-7995-2172André Luís Cabral de Lourençohttps://orcid.org/0000-0001-6374-7302ABSTRACT The article aimed to forecast the Brazilian economy’s growth potential in the 2016-2025 period, assuming the absence of changes in industrial policy. It is based on a formal growth model constrained by the balance of payments (BOP) developed by the authors and disaggregated into three sectors (farming, industry, and services). All its parameters were econometrically estimated, including those of the world economy relevant to the Brazilian economy’s performance. Assuming that the current macroeconomic management “tripod” was maintained in the country, the basic interest rate and exchange rate policy were calibrated to generate the maximum growth rate allowed by the external constraint compatible with the maintenance of inflation in target each year. Forecasts were also made about the performance of the three sectors’ key variables, resulting from such calibration. Forecasted potential GDP and productivity growth were low (even by recent historical standards) and decreasing over time, with slower growth in the industrial sector than in other ones. The results revealed the critical importance of the industrial sector for such performance, suggesting that an efficient industrial policy could significantly increase the Brazilian economy’s growth potential.http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1415-98482021000100201&tlng=enmacroeconomic simulationeconomic growthindustryBrazil |
| spellingShingle | Cryslãine Flavia da Silva Rodrigues André Luís Cabral de Lourenço A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) Revista de Economia Contemporânea macroeconomic simulation economic growth industry Brazil |
| title | A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) |
| title_full | A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) |
| title_fullStr | A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) |
| title_full_unstemmed | A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) |
| title_short | A CASE FOR INDUSTRIAL POLICY? FORECAST RESULTS FROM A DISAGGREGATED BOP-CONSTRAINED GROWTH MODEL FOR BRAZILIAN ECONOMY (2016-2025) |
| title_sort | case for industrial policy forecast results from a disaggregated bop constrained growth model for brazilian economy 2016 2025 |
| topic | macroeconomic simulation economic growth industry Brazil |
| url | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1415-98482021000100201&tlng=en |
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