The cycle of commodities and uneven regional growth in Brazil between 2005 and 2014: a computable general equilibrium approach

Abstract

The principles of uneven development are important for understanding the Brazilian regional reality, which has peculiar contours by dependence on commodity exports. Given the locational rigidity and the volatility of prices characteristic of this market, the spatial distribution of the impacts of these activities assumes importance in the persistence of regional inequalities. This work advances with the use of the IMAGEM-B (Integrated Multi-Regional Applied General Equilibrium Model – Brazil) model, configured to capture shocks impacts on commodities. The analysis allows us to conclude that the Brazilian economy presents significant responses to the price effect of commodity exports (investment, regional employment, income and consumption), the quantum effect on exports to other commodity exporting regions (domestic exports and imports) and the aggregate result of GDP. Even though the Brazilian regions show the same behavior as the national economy, as a whole, this occurs with regions registering different rates, resulting in economic concentration in the Southeast and a timid process of deconcentration in a few other regions. For regions that are highly dependent on commodities, the main effect of price volatility is the reduction of investment rates and long-term growth.