“…The production function exponents on capital, α = 0.29, and labor, θ = 0.35, are disciplined by the the share of income paid to capital and the earnings share of the right tail, since 1 − α − θ is the share of entrepreneurial income, which is captured in the tail. For Brazil, capital's share can be calculated from the Penn World Tables (PWT) 9.1, and over the years of interest it averages to be 0.40, the same value reported by Abeles, Amarante, and Vega (2015). 16 For the income tail, we target the fact that top 10% of earners receive 56% of total income, according to Morgan (2017).…”