The regional contradictions of economic growth in Brazil: The rise and decline of the 2002-2018 cycle

Abstract

One of the best-known stylized facts in the regional economic literature is the fact that growth does not manifest itself everywhere at the same time. This article examines the regional economic growth of Brazil between 2002 and 2018, seeking to identify the adherence of the macroeconomic context through the municipalities. We propose the analysis of the variation in the level of aggregate product and its sectoral composition for the 5570 municipalities of Brazil based on data from the Brazilian Institute of Geography and Statistics. The results indicate the existence of two general contradictions in the process of economic growth in the period: 1) even in the period of greater dynamism, a considerable proportion of the municipalities were in recession; 2) Regions in the cyclical center of the national economy showed persistently low growth rates, associated with long-term structural problems. The crisis and stagnation of the Brazilian economy, after 2014, led to the expansion of these contradictions and demand regional policies capable of ensuring growth with social and productive development.