Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 32, No. 1, pp.23-62
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2019
Received 03 Jul 2018 Revised 12 Dec 2018 Accepted 21 Jan 2019

Brazil and the Middle-Income Trap: Its Historical Roots

Eduardo da Motta e Albuquerque
Eduardo da Motta e Albuquerque, Professor, Department of Economics and Cedeplar-UFMG, Belo Horizonte, Minas Gerais, Brazil, Tel: +55-31-34097076, Fax: +55-31-34097203 albuquer@cedeplar.ufmg.br

JEL Classification: O1, O43, N16

Abstract

This paper evaluates the alternation between catching up periods and falling behind periods in Brazilian economic history, with data from 1870 to 2016. This alternation expresses the middle income trap. A tentative theoretical framework is presented, suggesting a two-dimensional process, with external forces (basically technological revolutions in leading countries) increasing the gap between Brazil and the leading economy, and internal forces (basically planned or unplanned internal efforts, especially industrial policies) reducing that gap. The historical origins of this long term middle income trap is discussed, with a special focus in the role of income inequality.

Keywords:

Underdevelopment, Development, Middle income trap, Catching up, Falling behind

Acknowledgments

The research that led to this paper is supported by CNPq (Grants 302857/2015-0, 401054/2016-0). I would like to thank Prof. Keun Lee for inviting me to the “Political Economy of the Middle-income Trap” (26th SJE International Symposium, 3 July 2018) session during the 17th International Society Conference in Seoul. A research meeting with Prof. Keun Lee at Cedeplar-UFMG in Belo Horizonte (30 August 2017) was very important to this line of research on middle-income trap (MIT). I would like to thank the participants of the 26th SJE International Symposium sessions for their comments and criticisms. Special thanks to Prof. Wilson Suzigan, who generously commented on a previous version of this paper at a meeting in Unicamp, Campinas (28 August 2018). I would like to thank Gustavo Britto for inviting me to examine Júlia Dias’ essay on middle-income trap (MIT) literature (FACE-UFMG, 6 December 2018, Belo Horizonte). I would like to thank the SJE referees for their comments, corrections, and suggestions and the SJE editor for the challenging comments that contributed to the improvement of this paper. The usual disclaimer holds.

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