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Do demand and profitability stimulate capital accumulation? An analysis for Brazil

2015-08

LC/G.2643-P
9

This article tests whether the profit share of gdp and capacity utilization affect capital accumulation in Brazil in the period 1950-2008 (in the sense of Granger causality). The methodology developed by Toda and Yamamoto (1995) is used to verify the Granger non-causality hypothesis. The results show that capacity utilization “Granger-causes” capital accumulation in the Brazilian economy and, also that the profit share of gdp does not “Granger-cause” the national investment-capital ratio. This corroborates the Kaleckian proposal based on the fundamental role of the accelerator, and suggests that the Brazilian economy can grow with either a concentration or a de-concentration of income, provided a suitable institutional arrangement is in place.

Comisión Económica para América Latina y el Caribe (CEPAL) - Biblioteca Hernán Santa Cruz

Mirian Ramirez

Biblioteca CEPAL, Edificio Naciones Unidas, Av. Dag Hammarskjold 3477, Santiago, Chile

(+56-2) 2210-2337

Desarrollado por: Aikyu-Systems