Three essays on distribution and economic expansion of a dual economy

Henrique Morrone
This dissertation aims to investigate the evolutionary process of a dual economy, using the Structuralist approach. In this sense, the work is divided in three parts. Firstly, we make a brief introduction of the literature on the dynamic between distribution and economic expansion. Specifically, it discusses the Structuralist approach to a dual, open-economy. The review of this model suggests that further research that incorporates distributive issues might be a fertile avenue (area) to
more » ... sh a better understanding of a developing economy. The second part presents a methodology to estimate a Social Accounting Matrix for Brazil in 2006 that separates between formal and informal sectors. The goal of this study is to estimate and to analyze the Social Accounting Matrix for Brazil in 2006. The shares of output by informal and formal sectors are applied as weights to estimate the size of the two sectors. The results reveal important structural linkages between the two sectors and may serve as data input for future Structuralist Calibrated models. Thirdly, the last part presents a dual, open-economy model that describes the schematic behavior of the Brazilian economy. We compare the short-run effects of two major experiments: an income transfer toward workers in the modern sector and an income transfer to workers from the subsistence sector, and discuss them in the context of Brazil. The results suggest that redistribution under certain conditions may lead to economic expansion.
doi:10.26053/0h-cqq9-3m00 fatcat:hssdigdn7rav3gsxctbenyvb4q