Manufacturing industry and growth: An interpretation for the performance of the brazilian economy in the 1990s and 2000s

Abstract

The loss of importance of the manufacturing industry in GDP greatly explains the poor performance of the Brazilian economy in the last two decades, despite the improvement in the standard of living of the population. In this chapter, it is assumed that the growth of developing economies is associated with structural change, and its dynamism depends on how the stimuli from aggregate demand are transmitted to the productive structure to promote change toward the development of productive sectors with the greatest potential to add value. In this sense, a virtuous growth cycle, in Myrdal and Kaldor terms, will emerge if short-term economic polices allow policy space for the implementation of long-term developmental policies, which has not been observed in the Brazilian case in the 1990s and 2000s.