Brazilian’s structural change and economic performance: structuralist comments on macroeconomics policies

Abstract

This article evaluates the impact of macroeconomic policies on the real side of the Brazilian economy. We present a Structuralist model in growth terms based on Rada (2007) to investigate the recent economic performance of Brazil. The Social Accounting Matrix for Brazil in 2006 serves as a benchmark for our model. We investigate the short/medium term effects of four simulation exercises: a rise in autonomous investment (animal spirits), an increase in wages, a exchange rate depreciation, and a rise in labour productivity growth. The results suggest that the Brazilian economy is weakly profit-led. In this vein, only macroeconomic policies that increase autonomous investment and labour productivity can stimulate the economy