Productive restructuring: effects on Brazilian regional development distribution

This paper aims to evaluate the dynamics of Brazilian regional development during the 1985-95 period. First, regional inequalities indexes were calculated for the whole country’s economy based on the per capita regional income (Williamson Inequality Index), in order to test the convergence or divergence. After this, the analysis aimed to verify the sector and regional dynamics in a more detailed exam, and for this purpose Dispersion Quotients and Dispersion Intensity Coefficients were calculated based on two variables, the Regional Gross Domestic Product and the Working Population. The results of the analysis confirm the existence of considerable regional disparities and it was verified that the sector and regional redistribution of the GDP indicate that, in a general way, no remarkable changes occurred in the regional productive structures in the period. It is also inferred that the economic policy at that period, in spite of resulting in a global regional convergence process of the per capita product, did not avoid the continuation of the concentration of greater economic dynamism in the most advanced regions, nor did it diminish in any considerable way the difference in the degree of development of the Northeast region.

Environmental policy and growth when inputs are differentiated in pollution intensity

Environmental policy affects the distribution of market shares if intermediate goods are differentiated in their pollution intensity. When innovations are environment-friendly, a tax on emissions skews demand towards new goods which are the most productive. In this case, the tax has to increase along a balanced growth path to keep the market shares of goods of different vintages constant. Comparing balanced growth paths, we find that an increase in the burden of environmental taxation spurs innovation because it increases the market share of recent vintages. As a result the cost of environmental policy in terms of slower growth is weaker and may even be absent.