Convergência Regional Brasileira Revisitada

Abstract

This article analyzes regional convergence dynamics in Brazil based on an adapted version of Hall and Jones (1999) that includes labor and capital mobility. Computational simulations indicate a tendency towards spatial concentration and the development of two alternative steady states for Brazilians regions per capita GDP: a poor and a rich one. The South and Center-West regions tend to reach the per capita GDP of the richest region, the Southeast. On the other hand, the poorest regions, Northeast and North, do not present a substantial change in their per capita GDP dynamics, remaining at inferior levels of per capita GDP (3.0 and 2.8 times less than the other regions, respectively). The main reason for this result lies in the significant differences in aggregate productivity across regions. Even though the richest regions present larger endowments of production factors, their higher aggregate productivity keeps capital and labor productivity rates higher than in poorer regions.