Abstract
This paper investigates the sources of structural change in the Brazilian economy in the 2000s. On that purpose, it uses the input-output structural decomposition analysis and introduces a method to correct the influence of prices on the time behavior of the technical coefficients, making them actually represent changes in the production structure. Results show that most of the growth differential between services and industry in that period was induced by the production structure: more precisely, by a lower intermediate consumption of domestic industrial inputs by the production chain of all economic sectors, concomitant with a higher intermediate consumption of services.
Highlights
In the 2000s, Brazilian economy established a model based on the expansion of consumption and on low savings rates, supported by the export of commodities and the absorption of foreign savings
Despite the fact that the manufacturing’s declining share of the Brazilian Gross Domestic Product (GDP) was largely a 1980s phenomenon – see Nassif (2008), the behavior of the real exchange rate induced by this model sparked a heated debate about structural change in the Brazilian economy3
Using that as a starting point, this paper investigates the sectoral dynamics in the Brazilian economy in the 2000s, in order to make a distinction between the effects produced by the demand side and by the supply one on recent structural changes
Summary
In the 2000s, Brazilian economy established a model based on the expansion of consumption and on low savings rates, supported by the export of commodities and the absorption of foreign savings. The other two components accounted, respectively, for 38.5% and 32.9% of that differential These components differ from each other due to the fact that, while government consumption exerted an important impact only on services (especially on the own services of public administration, health and education), personal consumption shows an influence on the whole economy (even though, throughout the analyzed period, this influence was more significant on the service sector). To carry out this analysis, the present paper is organized into three sections in addition to this introduction.
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