The main purpose of this paper is to empirically investigate whether, between 1970 and 2008, the Brazilian economy was profit-led or wage-led. To this end, we approach a canonical post-Keynesian growth model (PKGM) to estimate certain vector autoregressive (VAR) models and perform Granger non-causality tests. Three main results are extracted from the generalized impulse-response functions provided by the VAR models. First, a positive profit-share innovation affects economic growth and capacity utilization rate, both in the same direction, suggesting a profit-led pattern. Second, a profit share shock positively affects both the ratio actual/potential output, and capital accumulation, reinforcing the previous result. Third, a capacity utilization shock is shown to positively affect both output growth and capital accumulation via the accelerator effect. On the one hand, the pairwise Granger non-causality test does not provide any evidence of causality running from profit share to economic growth or capacity utilization. On the other hand, there is some evidence of Granger causality running from profit share to capital accumulation. JEL CLASSIFICATION e12; e25; o40 ARTICLE HISTORY
The aim of this paper is to provide demand elasticities for the three main fuels used in Brazil: gasoline, ethanol and diesel. We used a panel data approach at municipal level for the period between 2007 and 2016. The innovation in this study is in its introduction of a new instrumental variable for prices, combining three taxes and municipal distance from state capital. The main results are as follows: (i) the gasoline, ethanol and diesel demands are price elastic, meaning that all own-price elasticities are greater than one; (ii) ethanol consumption is more elastic when the CNG price is added as an explanatory variable, but this does not apply to gasoline; (iii) an increase in GDP positively affects the demand for gasoline and diesel (less than proportionally), but does not affect demand for ethanol; (iv) fleet size impacts the consumption of all fuels, except when the CNG price is excluded from the ethanol model; (v) the ethanol-to-gasoline price ratio is a relevant variable for the demand of both gasoline and ethanol.
Purpose – The purpose of this paper is to ascertain whether countries benefit from capital account liberalization in more democratic contexts. Design/methodology/approach – The authors used the follow methodologies in this paper: Pooled OLS, panel data with fixed effects and generalized method of moments. The empirical exercises were conducted for both a large sample and a smaller group of developing countries. Given the characteristics of the variables used in the standard model, the main conclusions were obtained from an estimation that took into account the presence of fixed effects and endogeneity. Findings – Considering a sample of 77 countries, the authors were able to ascertain that capital account openness has a positive effect on economic growth only in highly democratic countries. When the same estimates are carried out with a more restricted sample, composed of 50 developing countries, the results are more pessimistic. In this case, capital account openness has a negative and significant effect, although being more democratic is not sufficient in itself to reap the benefits of financial integration. Research limitations/implications – The results obtained in this paper are limited to the number of observations and the period analysed. Furthermore, the conclusions need to be confirmed by a test of robustness, which should be conducted in future works; such works could make use of other democracy indicators and other instruments. Originality/value – The innovation of the work, in comparison to those the authors consulted, resides in its testing, through an interactive variable, whether the effect of capital openness on economic growth depends on level of democracy.
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