Productivity, real exchange rate, and aggregate demand: An empirical exercise applied to Brazil from 1960 to 2011

Abstract

This research analyses, from a Post-Kaleckian perspective, the interactions among the aggregate demand, the real exchange rate, productivity and real wages in the Brazilian economy from 1960 to 2011. It adopts the longstanding perspective that demand is the driver of capital accumulation and economic growth. The research comprises the following steps: i) a critical assessment of the growth regime literature, with a particular emphasis on issues related to productivity and the real exchange rate; ii) understanding the relationship between the real exchange rate and the productivity and growth regimes; iii) proposing a theoretical model that relates the real exchange rate, productivity and the growth regime; and iv) an empirical test of the interaction between the real exchange rate, productivity and the growth regime. Theoretically the study develops a model showing the interactions between the aggregate demand, the real exchange rate, productivity and real wages. Furthermore, this research attempts to address the lack of theoretical and empirical studies about the relationship between the aggregate demand, the real exchange rate, productivity and real wages.

Productivity and inequality in the UK: a political economy perspective

“…By contrast, under a profit-led regime, devaluation affects productivity and economic growth negatively. In the case of Brazil, the empirical evidence provided in the study by Alencar et al (2018) clearly shows that a wage-led regime is the case.…”

“…These two testable hypotheses are empirically examined in six OECD countries, and for the period 1960 to 2007 to conclude that both hypotheses are supported empirically. A more recent contribution (Alencar et al 2018), and from a Kaleckian perspective, investigates the relationship between productivity and growth, labour unit costs, the real exchange rate and the real wage growth. This is investigated theoretically and empirically in the case of Brazil over the period 1960 and 2011.…”

Regime de crescimento, investimento e pensões no Brasil: Uma abordagem Pós-Keynesiana

“…Quadro 1-Teste Econométrico do Modelo. Dentro das inferências que podemos chegar estão; i) o volume das pensões representam impactos significativos na demanda conforme a massa de dependentes se eleva o que vai de encontro ao proposto no modelo de Rada (2012) apresentado na seção II, logo, recaindo diretamente sobre os investimentos; ii) a capacidade do sistema previdenciário de garantir as transferências intergeracionais são relevantes, considerando que um sistema de repartição ou um modelo alternativo semelhante, que visasse garantir renda ao trabalhador no futuro gera mais expectativas de aumento da propensão marginal a investir dado a elevação do consumo; iii) a taxa de utilização e investimento bem como a participação dos trabalhadores no mercado formal atualmente eleva o número de pensões pagas no futuro implicando um maior dinamismo ao sistema previdenciário, uma vez que, maior volume de demanda reflete positivamente nas taxas de crescimento do produto como aponta Oreiro (2016), Alencar et al (2018)…”

Brazil’s economic growth and real (div)convergence from a very long-term perspective (1822-2019): An historical appraisal

“…Even though these studies occasionally agree on some determinants that have hindered Brazilian economic performance (e.g.,, premature deindustrialization; balance-of-payment constraints), others present divergent conclusions (Carvalho and Carvalho (2019) vs. Araujo et al (2018) or Alencar et al (2018) vs. Jesus et al (2018). The disagreements are hard to disentangle, and the mixed results require delving even further into Brazil's economic history.…”