Vol. 41 No. 1 (2021): Jan-Mar / 2021

Vol. 41 No. 1 (2021)

Jan-Mar / 2021
Published February 9, 2021

Vol. 41 No. 1 (2021), Jan-Mar / 2021

The Rehn-Meidner Plan and the Swedish development model in the Golden Years

Felipe Maruf Quintas, Marcus Ianoni

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 3-22

In general, the literature on the developmental state studies Asia and Latin America, not Scandinavia. This article examines the developmental character of the state in Sweden, distinguishing it as a specific case, because its institutions and policies combine the simultaneous promotion of industrialization and social equity. The paper analyzes the Swedish model of development, centered in Rehn-Meidner Plan (R-M), a political strategy of the national development headed by the Swedish Social Democratic Party (SAP). It is argued that in Sweden industrialization and the construction of the welfare state were two sides of the same coin. The R-M Plan played a key role in consolidating the Swedish model between 1945 and 1975. It combined and articulated economic development, centered on industrialization, reduction of social inequalities, and fiscal and monetary stability. It increased productive complexity and equality, unified economic policy and social policy, planned industrialization and income redistribution. It was structured through a broad power pact among workers, industry, farmers, political representatives elected by SAP and public bureaucracy. It was institutionalized, above all, by the democratic corporatist arrangement of centralized salary negotiations.

JEL Classification: O14; O21; N14

Population aging and inequality

Eliana Cardoso, Thais Peres Dietrich, André Portela Souza

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 23-43

This article outlines the profile of the population over 65 years old in Brazil. It describes the aging of the population and the differences in life expectancy in regions with different income levels. It discusses income and its distribution among people over 65 years old and shows that the income distribution among them is more egalitarian compared to the population under 65 years old. Finally, by reviewing some aspects of the discussion on pension reform, it concludes by perceiving the need for an agenda for training and qualification of the workforce throughout the life cycle. 

JEL Classification: D13; D63; J14.

Taxing wealth:

general principles, international perspectives and lessons for Brazil

Marc Morgan, Pedro Carvalho Junior

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 44-64

The international debate on wealth taxation has been subject to renewed interest amid new proposals coming out of the US electoral cycle and the salience of wealth inequality. This article reviews the case for taxing wealth and its transfer across generations (wealth and inheritance taxes), analyzing their design from an international comparative perspective, and extracting lessons for Brazil. The long-debated “Tax on Large Fortunes” has never been implemented and the state-level “Tax on Inheritances” has been watered down over time. We propose a framework for the progressive implementation and reform of both taxes in the country. We argue, given the historical record and current research, that they are technically and administratively feasible propositions, notwithstanding important political economy considerations.

JEL Classification: H24; H29

The public deficit and the growth of the federal securities debt (1995-2018)

Joaquim Miguel Couto, Luis Gustavo Alves Lima, Ana Cristina Lima Couto

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 65-78

The deficit of the public accounts is usually pointed out as the main responsible for the increase of the national debt. However, this is not true. The analysis done this study, for the period 1995 to 2018, showed that the Central Government nominal deficit represented only a smaller part of the growth of the Domestic Federal Public Debt (DPMFi). Other factors, mainly those related to the monetary and exchange policy of the Central Bank, explain most of the growth of the DPMFi in the period.

JEL Classification: H6; H63.

Financialisation and the Portuguese private consumption:

two contradictory effects?

Andreia Gonçalves, Ricardo Barradas

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 79-99

This paper makes an empirical evaluation of the relationship between financialisation and the Portuguese private consumption by performing a time series econometric analysis from the first quarter of 1996 to the third quarter of 2019. Framed within the post-Keynesian literature, financialisation has two contradictory effects on private consumption. The first one corresponds to the fall in the households’ labour income, which favours a deceleration of private consumption. The second one corresponds to the increase of households’ debt and the increase of households’ financial and housing wealth, which favours an acceleration of private consumption. The global net effect of financialisation tends to be positive because the beneficial wealth effect suppresses the harmful income effect. We estimated a private consumption equation that includes four control variables (unemployment rate, inflation rate, short-term interest rate and long-term interest rate) and three variables linked to financialisation (labour income, net financial wealth and housing wealth). Our results confirm that labour income, net financial wealth and housing wealth are positive determinants of Portuguese private consumption. Our results also show that financialisation has represented an important driver of Portuguese private consumption, particularly due to the beneficial effects of net financial wealth.

JEL Classification: C22; D10; E21; E44.

Behavioral economics of corruption and its implications

Roberta Muramatsu, Ana Maria A. F. Bianchi

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 100-116

This paper holds that the standard economic accounts of corruption based on expected costs and benefits are insufficient to understand and to tackle dishonesty in the real world. It embarks on a survey of the literature to discuss the major roles automatic judgments and decisions, as well as cognitive biases and social preferences might play in deviations from honest behavior. The paper further discusses the implications of behavioral economics to the debate over how to fight corruption and foster integrity.

JEL Classification: B40; B41; D90; D91.

Measuring the fiscal governance instruments:

a synthetic index for EU countries

Slawomir Franek, Marta Postula

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 117-136

The aim of the paper is to examine the collective effect of fiscal governance instruments (i.e., fiscal rules, medium-term budgetary frameworks, independent fiscal institutions) on the fiscal outcomes of EU member states. The results of panel data model estimation for 28 EU countries for the period 2004-2016 confirm a statistically significant and positive impact of synthentic index for those instruments on the general government balance to GDP ratio. Additionally, an adjustment of the synthetic index was proposed, taking into account the degree of autonomy of independent fiscal institutions, and the link between medium-term budgetary frameworks and the annual budget.

JEL Classification: H61; H50; E62.

Analysis of the effects of the New Automotive Regime (1996-1999) and Inovar-Auto (2012-2017)

Rodrigo Silveira dos Santos, Reno Schmidt, Vivian Sebben Adami, Fabrício Carlos Schmidt

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 137-154

The objective of this paper was to analyze the effects of the New Automotive Regime and Inovar-Auto Regime on the national production, export and import of automotive vehicles, using a comparative analysis of these public policies. In this comparative, we considered real data of the automobile industry, as well as information obtained through the promulgation of provisional measures, laws and decrees. No regime proved totally effective in expanding domestic production relative to world production. The first regime proved to be effective in increasing relative exports, but this was not the case for the second regime and both regimes proved effective in reducing imports.

JEL Classification: F13; L52; L62.

Economic growth and innovation:

an estimation of the innovation possibilities function

Ediane Canci

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 155-175

This article investigates the format of innovation possibilities function to the United States between 1950 and 2011. Is used the theoretical model of Kennedy (1964) for the estimation of econometric model. The database used was the United States Long Term – USLT organized by Dumenil and Lévy (1994). The results suggest that the innovation possibilities function is compatible with the description of technical progress happened during the analysis period and point the existence of a trade-off between the growth rates of labor productivity and capital to the United States in the period in study. 

JEL Classification: O47; O30; O11.

Determinants of the technological intensity of state exports for the period of rising commodity prices

Felipe Orsolin Teixeira, Daniel Arruda Coronel, José Luis da Costa Oreiro

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 176-197

The aim of this paper is to analyze the behavior and determinants of Brazilian states exports, by technological intensity levels, for the period of commodity prices shocks. The results showed that sectors of higher technology lost representativeness in exports and that the real exchange rate can facilitate access for strategic sectors in the international market.

JEL Classification: F43; R11; C23.

Vol. 41 No. 1 (2021), Jan-Mar / 2021

Comment on “Sraffa and the Labour Theory of Value: a note”

William Jefferies

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 198-201

This comment responds to Fabio Anderaos de Araujo’s article “Sraffa and the Labour Theory of Value: a note” (Araujo 2019), and specifically addresses the issue of commensurability originally developed in Jefferies (2015). 

JEL Classification: B12; B14; B24.

Comment on “Sraffa and the Labour Theory of Value: a note” – Reply to William Jefferies

Fabio Anderaos de Araujo

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 202-206

This is a reply to the criticisms raised by William Jefferies (Jefferies, 2020) to my article “Sraffa and the Labour Theory of Value: a note” (Araujo, 2019). In Jefferies (2020) the author has given great emphasis to the question of physical commensurability between input and output in Sraffa’s price model. 

JEL Classification: B12; B51.

Comments to the article “The political role of the State in Cambridge theories of growth and distribution”

João Gabriel de Araujo Oliveira, Renato Nozaki Sugahara, Joanilio Rodolpho Teixeira

Brazilian Journal of Political Economy, Vol. 41 No. 1 (2021), Jan-Mar / 2021, Pages 207-214

This comment came to refute and correct the idea of Charles (2007) about the negatively implications in the income distribution when the government expand the consumption in favour to households. We prove that the political choice, to both cases (increasing consumption or increasing profit), impact positively the income distribution and does not affect the essential nature of the Kaldor neo-Pasinetti dynamic equilibrium results and the “Cambridge Equation”. The stability of the model is guarantee by applying the Olech’s Theorem to the case.

JEL Classification: O15; E12; G38.