Methodological influence on Brazilian deindustrialization

Abstract

Users of Brazilian National Accounts often use the overestimated sectoral share due to the financial dummy not being eliminated from sectoral GDP. This affects the level, peak, and shape of the deindustrialization series. Changes in the National Accounts system have also caused structural breaks in time series, making it difficult to assess the effect of trade opening on deindustrialization. This study created series of sectoral shares in GDP from 1947 to 2019 to circumvent the financial dummy and discontinuities in the long-term series. The new series is more adherent to economic cycles, captures the effect of trade opening, and contests the over-industrialization thesis, allowing a better understanding of the deindustrialization process.