Brazilian Economy Research Articles

Can ignorance about the interest rate and macroeconomic surprises affect the stock market return? Evidence from a large emerging economy

This paper analyzes whether the “ignorance” of private agents regarding the monetary policy interest rate and macroeconomic surprises affects the return in the stock exchange in a large emerging economy. Based on the Brazilian economy from January 2005 to September 2021, we build a measure of “ignorance” from the signal-to-noise ratio of the monetary policy interest rate and evaluate its effect on the stock market return. Furthermore, we analyze whether the “surprises” from macroeconomic variables can affect the stock market return. The findings indicate that increases in the “ignorance” of private agents regarding the monetary policy interest rate have a negative and statistically significant effect on the stock exchange return. Moreover, macroeconomic “surprises” have effects on stock market return.

Does age modulate the impact of import competition on job type?

This study investigates the effects of the 2000–2012 increase in import competition in the Brazilian economy on the type of manufacturing jobs available to different age groups. These effects are assessed using a multinomial logit model and household survey data that cover formal, informal, and self-employed workers. The empirical estimates indicate that an increase in the Chinese or in the rest of the world import penetrations expand self-employment only among young workers. Larger Chinese imports reduce self-employment for middle-aged workers. In contrast, greater imports from elsewhere increase informality across all age groups, though the magnitude is decreasing in age. These estimates are robust to endogeneity concerns through the use of a control function approach.

Allelic Complementation in Hybrid Superiority of Popcorn to Multiple Foliar Diseases

Popcorn cultivation has been growing in and has positively affected the Brazilian economy. However, these crops are grown with genotypes susceptible to diseases, generating high losses. Thus, studies aimed at obtaining resistant genotypes are particularly interesting, as popcorn is susceptible to several pathogens. The most efficient, environmentally correct, and economical method of disease control is using resistant cultivars. The present study aimed to evaluate the performance of inbred lines of popcorn and their respective testcross hybrids in terms of diseases caused by fungi. For this purpose, 15 S7 inbred lines were crossed with five testers, four with a narrow genetic basis (inbred lines L270, L651, P1, and L70) and one with a broad genetic basis (open pollination variety PARA 172). The arrangement of treatments in incomplete blocks (lattice 10 × 10) with three replications was used. The testcross was efficient in the discrimination per se of the progenies and the testers. The inbred lines L685, L691, L696, and L684 and the PARA 172 tester showed potential resistance to P. polysora, B. maydis, and E. turcicum. The GT biplot method proved reliable in identifying efficient, responsive, and resistant inbred lines and revealing the hybrid 56 as the ideal genotype.

Economic analysis through alternative data and big data techniques: what do they tell about Brazil?

Alternative data are now widely used in economic analyses worldwide but still infrequent in studies on the Brazilian economy. This research demonstrates how alternative data extracted from Google Trends and Google Mobility contribute to innovative economic analysis. First, it demonstrates that the search for the future on the internet is correlated (R = 0.62) with the average household income in Brazilian states. The three Brazilian states with the most people looking for the future on the internet have an average household income 1.6 times higher than people from states that do not have this behavior. The search for the future represents 10.9% of the economic development potential of the states, while the proportion of people with university degrees, scientific publications, and researchers represents another 60.4%. The reduction in mobility in retail/recreation locations averaged 34.28% in Brazil, Ecuador, Paraguay, and Uruguay. This group of countries had COVID-19 infection and death rates 1.25 and 1.74 times higher than in countries that reduced their mobility in retail/recreation locations by 45.03%. The impact of reduced mobility in retail/recreation locations on the unemployment rate, gross domestic product degrowth, and inflation in countries such as Brazil was 1.1, 2.2, and 2.6 times lower than in countries that reduced mobility more of people. The research contributions are associated with identifying new indicators extracted from alternative data and their application to carry out innovative economic analyses.

Observed and expected interest rate pass-through under remarkably high market rates.

This paper investigates the pass-through from observed and expected policy interest rates to the remarkably high lending rates in the Brazilian economy, accounting for financial-institution specific characteristics, borrower types, asymmetric adjustment and persistence in loan rates. We use a unique and non-public dataset with expected variables identified by professional forecasters and apply a fixed-effects approach to alternative specifications as robustness checks. Financial institutions correctly forecast the next target level of the policy rate and anticipate adjustments in their loan rates. There is evidence of over-proportional and positively asymmetric pass-through to loans with higher interest rate margins, implying a positive correlation between degrees of pass-through and spreads across persistent lending rates. These findings contribute to explain why loan interest rates are so high in the Brazilian economy.

Flexible pavement with mining waste proposal - execution and analysis of an experimental section

The extraction of iron ore has a fundamental role in the Brazilian economy. However, such activity generates considerable volumes of waste whose disposal, even if regulated and licensed, has a significant environmental impact. The worldwide concern for sustainable practices along with the urgency for measures to mitigate environmental damage, justifies research on its use in other activities. Therefore, the present study aims to analyze the test results of laboratory versus field of mixtures composed of mining waste. The field studies were made on the execution of an experimental section on the BR 040 highway, in Minas Gerais - Brazil. According to the validation of the laboratory results, the mixtures composed of 35% Tailings + 15% Waste Rock + 50% Canga of Ore and 35% Tailings + 20% Gravel 1 + 45% Gravel 0 were used in the base and sub-base layers of the experimental section, respectively. The field technological control showed that the mixtures had an anomalous behavior from the one observed in the laboratory, mainly regarding strength and deformability.

Fiscal multipliers, public debt and economic cycle: SVAR and MS-VAR models for the Brazilian economy in the period 1997-2018

Resumo Este estudo avalia a capacidade da política fiscal em suavizar o ciclo econômico brasileiro. Para tanto, são estimados multiplicadores para variáveis fiscais desagregadas. Considerando os impactos positivos da política fiscal sobre a atividade econômica, as respostas do produto aos choques diferem entre as fases recessivas e expansivas do ciclo durante o período de 1997 a 2018. Em termos de condução de política econômica, os resultados revelam que os estímulos à demanda agregada são mais adequados em um contexto recessivo. Por fim, os autores mostram que a inclusão da dívida líquida nas equações do modelo não altera o comportamento dos choques no SVAR. Contudo, embora modifique alguns resultados do MS-VAR, não se trata de uma variável predominante para a magnitude do multiplicador fiscal, pois as flutuações cíclicas prevalecem sobre o tamanho do impulso fiscal.

Numerical modelling of the seismic response of gentle slopes in Southeastern Brazil

The offshore Campos Basin, located in Southeastern Brazil represents an important area in the Brazilian economy as it is one of the most prolific oil-producing basins in the country. With the development of offshore infrastructures in this region, structural design and location must consider different geohazards. This paper addresses the seismic response of gentle submarine slopes subjected to small-to-moderate-sized earthquakes, representative of the Brazilian seismic conditions. The seismic analyses employed numerical modeling, with a nonlinear constitutive model. A set of bedrock ground motions representative of the offshore Campos Basin seismicity was obtained, employing a Uniform Hazard Response spectrum for the region and earthquakes from the Pacific Earthquake Engineering Research (PEER) database. Numerical modelling results showed that, even for small slope angles and moderate earthquakes, there is an accumulation of permanent displacements and shear strains in the downslope direction can affect the stability and performance of existing offshore infrastructures. The findings of this research provide a valuable reference for the prediction of seismic displacements, shear strains and seabed amplification or attenuation of earthquakes on gentle slopes in deep-water deposits similar to those found in the offshore Campos Basin.

COLLECTIVE ORGANIZATIONS AND RURAL PROPERTIES: DAIRY FARMING DIAGNOSTICS IN SOUTHERN MINAS GERAIS STATE

The milk production chain is a sector of great importance for the Brazilian economy, and it consists mostly of small producers. Collective cooperation practices are fundamental for assisting in the development of these activities and for strengthening dairy farming. However, milk producers often do not pay attention to the need to participate in the associations, cooperatives and other organizations of people (OP) that may provide help for many problems that devastate the everyday activities of dairy farms. This study aimed to investigate the main influences that these collective organizations can exert on dairy farms and to identify the structure of the relational interaction between them. A total of 115 dairy farmers from 8 cities in southern Minas Gerais state, including Campestre, Caldas, Ipuiuna, Poço Fundo, Elói Mendes, Poços de Caldas, Machado and Paraguaçu, were interviewed. Multivariate analysis was performed using Pearson correlation to identify the main existing influences. The results indicated correlations between the cooperatives, associations and other collective organizations and dairy farms in several areas, such as technological and managerial development, registration and access to information and production scale. It was possible to determine how the relationships between the collective organizations and dairy farms occur in southern Minas Gerais state. The results showed the influence that these collective organizations exert on dairy farms, which reinforces their importance for the milk production chain.

Exports of manufactured goods and structural change: Brazil in the face of Chinese competition

This paper analyses the relationship between Brazil´s regressive specialisation and China´s increased international competitiveness. The Brazilian economy's lack of dynamism and competitiveness in global markets, particularly when it comes to the production and exportation of manufactured goods, has coincided with China's rise as a global powerhouse. This is why we have considered whether an increase in China´s market share in a third country's market is associated with an increase or decrease in Brazil´s market share. To test this relationship, we applied a generalised method of moments (IV-GMM) in a panel data framework. Our main results suggests that: (i) China´s market share increases were associated with decreases in Brazil´s share; and (ii) the effect of Chinas´ market share can change according to the size of the partner's economy. Finally, we have explored the implications of our findings considering Keynesian and structuralist theories, which highlight the importance of the manufacturing sector.

Major Macroeconomic Variables, Monetary Policy, and the Determination of the Neutral Interest Rate in Brazil

This research used ARDL methodology to explore relevant macroeconomic variables influence on the Brazilian neutral interest rate. As a non-observable variable, we used this approach to identify the determinants of neutral interest rate in the Brazilian economy not only in the short term but also in the long run. Our descriptive analysis highlights that the trend of the real interest rate in Brazil has also been decreasing in recent years. In this paper we attempt to identify which variables could have driven such a fall. We used monthly data from January/2003 to June/2021 and the macroeconomic variables investigated are described as follows: neutral real interest rate (NRI), inflation rate (INF), 3-month treasury bill rate (TB3MS), real exchange rate (EER), Economic Activity Index (IBC-Br). All data were collected from IBGE, IPEADATA and Central Bank of Brazil (BACEN). We achieve that the variables that positively influence the long-term real interest rate are the inflation rate followed by the global interest rate trajectory and the real exchange rate, respectively. On the other hand, economic growth according to its potential level has a negative and relevant impact on the real long-term interest rate.

Palm Oil Diaspora: Afro-Brazilian Landscapes and Economies on Bahia's Dendê Coast

Palm Oil Diaspora: Afro-Brazilian Landscapes and Economies on Bahia's Dendê Coast

Drivers and barriers in sustainable supply chains: The case of the Brazilian coffee industry

Despite the growing interest in sustainable practices, many organisations in the agro-food industry are currently struggling to implement sustainable supply chain (SSC) innovations. This research addresses this gap by studying the Brazilian coffee industry, which is considered not only an important commodity for the Brazilian economy, but also for the global market. To achieve the goals of this study, a bibliometric assessment of the literature was carried out to understand the drivers and barriers of SSCs, and based on the findings, a survey was conducted with a set of Brazilian coffee stakeholders, obtaining a total of 147 complete answers. The results suggest that the main drivers involved in sustainable supply chain management (SSCM) of the Brazilian coffee industry are social responsibility, economic performance/improvement, regulations (environmental, regional, international), and the adoption of an innovative business model. On the other hand, the barriers identified are the lack of government support, the high complexity of the processes and communication gaps. It is expected that the results of this study can contribute to the SSC literature and reduce the blind spots of decision-makers to prioritise actions and understand better how to overcome the barriers and take advantage of the drivers towards more SSCs in the industry. Limitations and future research opportunities are also addressed.

Impact of Climate Change on Cassava Yield in Guapimirim, State of Rio de Janeiro, Southeast Brazil

Global warming has changed the climate in many parts of the world and affected ecosystems due to anthropogenic greenhouse gas (GHG) emissions that contribute to the rise in the surface temperature of the planet. Rising temperatures have important effects on agriculture, which accounts for one- third of Brazil's economy. This study assesses the impact of climate change over agriculture on cassava yield in Guapimirim city, State of Rio de Janeiro, Southeast Brazil. Bias corrected climate simulation performed from the nested model Eta-HadGEM2-ES was used to reproduce the climate data observed in the region and for climate projections under Representative Concentration Pathways (RCPs) 4.5 and 8.5 scenarios. Simulated rainfall and evapotranspiration for the period between 1961 and 1990 was compared to the observation period and, showed a correlation with R² = 0.99 and the Average Absolute Percentage Error was less than 5.0%. The effect of climate projections on water stress during crop development was estimated using the Thornthwaite-Mather (TM) soil water balance adapted for crops. Rainfall and actual evapotranspiration projections for the three thirty-year periods 2011-2040, 2041-2070, 2071-2100 served as the basis for the assessment of the Water Requirement Satisfaction Index (WRSI) and Yield Reduction (YR) for cassava crop. Projections show significant cassava yield losses around 8.6 and 9.7 ton ha-1, respectively, under RCPs 4.5 and 8.5. This approach allows exploratory analysis applied to support crop management decision-making and irrigation strategies for sustainable agriculture and to increase crop yield in the face of impacts of climate change.

Are there synergies in the decarbonization of aviation and shipping? An integrated perspective for the case of Brazil

SummaryAviation and shipping account for 22% of total transport-related CO2 emissions. Low-carbon fuels (such as biofuels and e-fuels) are the most promising alternatives to deeply decarbonize air and maritime transport. A number of technological routes focused on the production of renewable jet fuel can coproduce marine fuels, emulating the economies of scope of crude oil refineries. This work aims to investigate possible synergies in the decarbonization of aviation and shipping in Brazil, selected as an interesting case study. An Integrated Assessment Model (IAM) of national scope is used to explore different combinations of sectoral and national climate targets. This IAM represents not only the energy supply and transport systems but also the agricultural and land-use systems. In the absence of a deep mitigation policy for Brazil, results indicate synergies related to oilseed- and lignocellulosic-based biofuels production routes. Imposing a strict carbon budget to the Brazilian economy compatible with a world well below 2°C, the portfolio of aviation and shipping fuels changes significantly with the need for carbon dioxide removal strategies based on bioenergy. In such a scenario, synergies between the two sectors still exist, but most renewable marine energy supply is a by-product of synthetic diesel produced for road transport, revealing a synergy different from the one originally investigated by this work.

Production and Price Cycles in Beef Cattle in Rondônia State, Brazilian Amazon

The study evaluates the behavior of production and prices in the beef cattle market in Rondônia, Brazilian Amazon. Covering the period from 1995 to 2020, we used statistical analysis based on the classical multiplicative method of time series. Resultingly, we found that the occurrence of annual seasonality in prices, with a reduction in the first half of the year and an increase in the second half of the year, corresponding to the bovine and off-season harvests, respectively. It was possible to observe the existence of three complete livestock cycles, with an average duration of five years. Trend, seasonality, and cycles of livestock in Rondônia, over the last 25 years, expose a series of relevant information for decision-making by agents in the livestock production chain, in addition to contributing to the understanding of the dynamics of this important agricultural market for Rondônia and Brazilian economy.

Heat and Mass Transfer in Structural Ceramic Blocks: An Analytical and Phenomenological Approach

The ceramic industry is one of the pillars of the Brazilian economy, characterized by making low-cost products and an obsolete manufacturing process from a technological point of view. Among the various stages of production of ceramic materials, drying is one of the most energy-consuming and, in general, causes structural damage to the product, compromising its mechanical performance and final quality. Despite the relevance, studies on the drying of ceramic materials are mostly conducted at the experimental level and limited to some specific operational conditions. In this scenario, this research aims to theoretically study the heat and mass transfers in industrial ceramic blocks during drying. Based on the lumped analysis method, and considering the dimensional variations of the material, new phenomenological mathematical models and their respective analytical solutions are proposed to describe the kinetics of mass loss and heating of the material. The predicted results referring to the thermal and gravimetric behavior of the block during the oven drying process under different conditions are compared with the experimental data, obtaining excellent agreement between the results. Furthermore, the transport coefficients were estimated, proving the dependence of these parameters on the drying air conditions. The convective mass transfer coefficient ranged from 6.69 × 10–7 to 15.97 × 10–7 m/s on the outer surface of the block and from 0.70 × 10–7 to 1.03 × 10–7 m/s on the inner surface of the material when the drying air temperature ranged from 50 to 100 °C. The convective heat transfer coefficient ranged from 4.79 to 2.04 W/(m2.°C) on the outer surface of the block and from 1.00 to 0.94 W/(m2.°C) on the inner surface of the material when air temperature ranged from 50 to 100 °C.

Ambidexterity and organizational performance of Brazilian exporting companies

Objective: To investigate the effect of exploration, exploitation, sales growth and profitability of exporting companies located in four Brazilian states. Method: Data were processed and analyzed based on multivariate statistical procedures and Structural Equation Modeling with 216 exporting companies located in four states of Brazil, an emerging economy country. Main Results: The findings reveal a positive and significant effect of the exploration and exploitation dimensions on sales growth and profitability in the sample of companies investigated. Relevance / Originality: The analyzed regions are considered important for the Brazilian economy because they have different characteristics in geographic position, an abundance of natural resources, export of products and diversity of human knowledge. Finally, a theoretical framework was developed that covers the theory of Resource-Based View (RBV), exploration, exploitation and organizational performance dimensions. Theoretical / Methodological Contributions: The proposition of a theoretical framework containing relational aspects of the dimensions of ambidexterity (exploration and exploitation) and organizational performance (sales growth and profitability) associated with the RBV theory can contribute to the theoretical improvement of administrative sciences. Social / Management Contributions: The analyzed sample showed low profitability is more prone to exploitaton capabilities. On the other hand, companies with high profitability showed a greater inclination towards exploration capabilities. Companies with low sales growth indicate a greater inclination towards exploration capabilities, despite the small difference between exploration and exploitation for a group of companies.

A Post-Keynesian Framework for Exchange Rate Equilibrium: Simulations for the Brazilian Economy

ABSTRACT The exchange rate is one of the most important macroeconomic variables. It directly influences trade and domestic price levels. The real exchange rate (RER) accounts for the price competitiveness of exports; the nominal exchange rate (NER), in its turn, pushes the domestic price level, affecting the achievement of the inflation target under an inflation target regime (ITR). The aim of this work is to present an RER model for external equilibrium and to assess the long-run effects of NER depreciation on inflation. The results are evaluated through simulations for the Brazilian economy. They suggest that the RER was overvalued from 2005 to 2018 and indicate that an overappreciated NER was an important tool to avoid inflation from 2005 to 2014. Therefore, under an ITR, there is no expectation to achieve an RER consistent with the current account equilibrium.

Regional Deconcentration in Brazilian Economy: Putting some Lights on the Industrial Sector in the 19952018 Period

The article analyzes the trajectory of industry and its reverberations across Brazilian regions during the period 1995-2018. The technical restructuring of industrial activities is investigated through the macroregional scales (North, Northeast, Southeast, South and Midwest) and the relevant industrial agglomerations. Results have indicated that the recent movements of regional deconcentration continue to occur but are on a small scale and mainly linked to intensive activities in natural resources and labor. The perceived changes in the composition of the industrial sector particularly in the manufacturing industry –, as something new within Brazil’s economic development, are an indication of how this sector has lost its relevance in the expansion of the national economy.