BRASIL Las Realidades de una Nueva Etapa de Desarrollo Prof. Aloísio Araujo EPGE/FGV - IMPA.
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Transcript of BRASIL Las Realidades de una Nueva Etapa de Desarrollo Prof. Aloísio Araujo EPGE/FGV - IMPA.
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BRASILBRASIL
Las Realidades de una Las Realidades de una Nueva Etapa de Nueva Etapa de
DesarrolloDesarrollo
Prof. Aloísio Araujo
EPGE/FGV - IMPA
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GDP Growht Rates in 1930-2000
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1931-50 1951-80 1981-93 1994-2000
Brazil Latin America World
GDP Growht Rates in 1930-2000
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1931-50 1951-80 1981-93 1994-2000
Brazil Latin America World
Growth
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Income per Capita of Korea / Income per Capita of Brazil
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Growth Rate Decomposition
Mankiw, Romer & Weil’s Decomposition
Y=AKHL1--
TFP = GDPGrowth – 0,3* CapGrowth –0,5*SchoolGrowth – 0,2*LaborForceGrowth
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Human Capital
Quantity of Education
Latin America and the World
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Quantity of Education
Brazil is Getting Better
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Quality of Education
Barros (2001): Quantity vs. Quality
Relationship between Growth Rates and Years of Schooling and Scores in International Standardized.
Correlation between Growth Rates and International Tests Scores is much higher than between Growth Rates and Years of Schooling.
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Quality of Education: Brazil
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Quality of Education: Brazil & Latin America
Mathematics Results - Third Grade
0 50 100 150 200 250 300 350 400
Cuba
Brazil
Colombia
Paraguay
Rep. Dominicana
Peru
Student’s grades from the First International Compared Study (UNESCO) Mathematics Results from Third Grade
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Student’s grades from the First International Compared Study (UNESCO) Mathematics Results from Fourth Grade
Mathematics Results - Fourth Grade
0 50 100 150 200 250 300 350 400
Cuba
Brazil
Colombia
Paraguay
Rep. Dominicana
Peru
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Wage Inequality: Brazil and United States
Income inequality in Brazil is mainly due to education inequality
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Education Inequality is Deaceasing for Youngsters (13 years of age)
Source:A Agenda Perdida, 2002
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Credit
Credit to Private setor (1998)
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Investiment
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Government Surplus as a Percent of GDP
Investments as a Percent of GDP
Source: Kehoe et al., 2002
Chile and Mexico are very similar
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Private Credit as a Percent of GDP
Real GDP per Working-Age (15-64) person detrended by 2% per year
... However, they differ on Credit and Growth
Index of Real Wages in Manufacturing
Source: Kehoe et al., 2002
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Structural Reforms Already Done
Privatization Telecommunication
Mining, Steel
Electricity (?)
Water and Sewage (?)
Fiscal Responsibility Law
Renegotiation of Municipal and State Debts
StateBanks
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Income Redistributive Policies
Bolsa Escola to avoid child labor
Early Childhood Education
Adult Education
University Quota for Blacks?
Zero Hunger Program
Erradication of illiteracy
Young adult (Supletive)
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Structural Reforms: To Be Implemented
Independence of Central Bank
Retirement System
Tax Law
Labor Regulation
Bankrupcy Law
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Current Negotiations with State Governors
Retirement System Tax Law
• Increase the minimum age of retirement: women from 48 to 55 and men from 53 to 60
• Tax on the pension of retired workers with higher salaries
• Create conditions for development of pension funds for public employees
• Diminish the tax on labor and increase tax on consumption - descrease degree of informality in the labor market
•Diminish tax distortion
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New Bankrupcy Law (Chapter 11)
• Maintain current “concordata”, a pre-package
convenient for small and medium business
• Allow for broader scope of negotiation in other cases
• Create creditor´s comittee to avoid hold-up problem
• Mitigate priority (labor and fiscal) problems
• Mitigate sucession problems
• Incentivate debt-equity swaps (?)
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Final Comments
Flexible exchange rates and serious macroeconomic
policies (high interest rate and increase in primary
fiscal surplus) led to fall on “Brazil Risk” from 24 to 13
Further decline depending on new reforms which are,
however, politically difficult to implement
Once economic growth resumes, decline on Debt/GDP
ratio will allow long run sustentability of government
debt and further decline expected