Brazilian Keynesian Review

Editorial

Brazilian Keynesian Review — Fri, 17 May 2024 00:00:00 -0300

Technological Asymmetries and Intensities in the Dialogue Between Post-Keynesianism and ECLAC Thought: Some Empirical Evidence

Thiago Fernandes Ladeira, Fábio Henrique Bittes Terra — Sun, 07 Apr 2024 00:00:00 -0300

The magnitude of technological asymmetries may be a determining factor for the uneven growth pattern among countries. As this is an important dimension of heterodox economic thinking in the context of the balance of payments constrained growth models, an investigation into the dynamics of the technological gap and the level of technological intensity observed between countries from the North and South is timely. This is the effort undertaken in this essay for the totality of Latin American and Caribbean countries. Based on a linear regression model for panel data, it was possible to observe that the temporal dynamics of the average level of technological intensity of the countries evaluated tend toward an equilibrium close to the intensity observed in countries such as Portugal and New Zealand. Despite this, the value found is far from countries at the top of the classification established by the Economic Complexity Index (ECI), indicating the need for public interventions to improve the productive capacities of each country over time.

Logical Cause in J. M. Keynes’s Macroeconomics

César Cintra Freitas Signates, Pedro Cezar Dutra Fonseca — Sun, 07 Apr 2024 00:00:00 -0300

This paper aims to contribute to the philosophical debate in Keynes by connecting one of the probabilistic logical theories developed in A Treatise on Probability (Keynes, 1921) with his economic theory developed in the General Theory of Employment, Interest and Money (Keynes, 1936). Specifically, we interpret effective demand as an ‘effect’ of the law of marginal propensity to consume (Keynes, 1936) based on the theory of nomological causal knowledge contained in the Notes to Part III of the Treatise on Probability (Keynes, 1921). To do this, we explore some aspects of the theory of knowledge in logical probability in order to achieve the nomological causal knowledge present in the Notes to Part III. Subsequently, we interpret the law of marginal propensity to consume as one of the ‘nomological causes’ of effective demand by reorganizing the Keynesian economic argument based on his logical theory of probability.

Conventions and Brazil’s new sanitation framework

Larissa Silveira Côrtes, Juliana Riani, Marco Flavio Cunha Resende — Sun, 07 Apr 2024 00:00:00 -0300

According to the diagnosis of the Brazilian government, the lack of investments in sanitation in the country can only be overcome by opening this market to the private sector. In the Post-Keynesian perspective, private investment depends on confidence in an optimistic expectation regarding its return. In this perspective, expectations are formed based on conventions, defined as shared beliefs. This article aims to analyze whether the new sanitation law, Law nº 14.026/2020, by instituting changes in the sector, can give rise to a convention that contributes to stimulating private investment in sanitation in the country. We conclude that, although it constitutes a solid basis for changing the convention, the new sanitation law, without the support of other measures analyzed in this article, is not enough to stimulate private investment to the point of filling the gap in investment in sanitation in Brazil.

Pós-Keynesianismo e Desenvolvimentismo

Maria de Lourdes Mollo, Adriana Amado — Sun, 07 Apr 2024 00:00:00 -0300

The article resumes discussions held in the developmental debate in Brazil in recent years, to highlight what, in the contribution of Keynes, appears and is emphasized in the various developmental versions, distinguishing them as to the variables considered strategic.

Fiscal Policy from a Structural Economic Dynamics Approach with General Macroeconomic Constraint

Matheus Silva de Paiva, Júlio Fernando Costa Santos — Sun, 07 Apr 2024 00:00:00 -0300

The aim of this paper is to analyze how fiscal policy can affect per capita economic growth. Therefore, an extension of the model by Araujo and Lima (2007) was made, by considering the public sector taxation and public expenses. Our findings corroborate the fact that positive public savings relieve the external constraint. We demonstrate that sectoral public spending growth rate and sectoral public taxes growth rate can affects economic growth. Still, it shows that the rate of economic growth is sensitive to the sectoral composition of public spending and taxation. Finally, a computer simulation is presented.

Impacts of Financialization on Innovation: a study for Brazilian nonfinancial corporation in the period 2010-2018

Sun, 07 Apr 2024 00:00:00 -0300

At the business level, financialization can be expressed by the principle of maximizing shareholder value, increasing financial activities and indebtedness. By directing resources to these three spheres, financialization can reduce funds that could be used to finance innovation. This paper’s goal is to study the impacts of financialization on the innovations of publicly traded non-financial companies in Brazil between 2010 and 2018. For this purpose, a dynamic panel was estimated using the GMM-System using accounting and financial data. The results showed that the maximization of shareholder value and the increase in corporate indebtedness hampered innovation of these companies.

The role of the large firm in industrial dynamics: notes on a post-Keynesian-evolutionary synthesis

Igor Kippe Rubinsztajn — Sun, 07 Apr 2024 00:00:00 -0300

This paper aims to study the contribution of the investment decisions of large capitalist firms to the dynamics of the emergence and evolution of industries, through the cross-fertilization between three different approaches: the notion of uncertainty and its relationship with decisions to invest in Keynes and the Post-Keynesian literature, Steindl's analysis of firm growth and its relationship with industrial dynamics, and the evolutionary approach on technical change. Based on the literature surveyed, the paper reveals that these strategies – overlapping at times - will essentially depend upon the degree of liquidity preference; the gap between the rate of internal accumulation of large firms and the rate of market demand growth (i.e., the maturity of the industry); and the economic dimensions of technology (i.e., technological opportunities, cumulativeness and appropriability).

Income inequality in Brazil between 2019 and 2022: evolution of the sum of income and decomposition of the Gini coefficient based on the continuous PNAD

Sun, 07 Apr 2024 00:00:00 -0300

Income inequality in Brazil from 2019 to 2022 showed erratic behavior. From 2019 to 2020, inequality dropped. From 2020 to 2021, it rose. And from 2021 to 2022, it dropped again. In order to understand this behavior and investigate which factors contributed to it, data from the PNAD Contínua were explored using two approaches: 1) evolution of the income mass according to the different sources of income and the decile stratification of people based on effective income per capita; and 2) decomposition of the Gini coefficient, as well as its year-to-year variation, according to income sources. The estimates reveal the importance of social programs (Bolsa Família and Auxílio Emergencial) to explain income inequality in the country between 2019 and 2021, and of income from work to explain what happened in 2022.

Payroll tax relief: a sectoral characterization based on RAIS and National Accounts data

Sun, 07 Apr 2024 00:00:00 -0300

Discussions on the payroll tax relief policy have reemerged in the news due to President Lula's veto in October 2023 to a bill that proposed extending the measure until 2027. However, the resumption of public debate lacked the necessary technical rigor to analyze the complexity of the law and its effects. This article aims to contribute to this discussion by providing a detailed characterization of the sectors effectively benefited by the policy, using sectoral aggregations consistent with CNAE. The analysis reveals that it is not appropriate to mention 17 exempted sectors, but rather 141 exempted activities (CNAE classes). Furthermore, correctly aggregated sectoral data shows that the effectively exempted activities had worse outcomes in terms of employment and payroll (decline) compared to non-exempted activities (stability) between 2010 and 2021. Additionally, among the top 15 employing activities in the country, only 3 are exempted. Therefore, the measure is not aligned with best practices in industrial and technological policies, lacking clear criteria for sectors to be benefited, as well as performance goals and specific timelines for each sector.