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(Reference retrieved automatically from SciELO through information on FAPESP grant and its corresponding number as mentioned in the publication by the authors.)

Profit margins, exchange rates and structural change: empirical evidences for the period 1996-2017

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Author(s):
NELSON MARCONI ; GUILHERME MAGACHO ; JOÃO GUILHERME R. MACHADO ; RAFAEL DE AZEVEDO RAMIRES LEÃO
Total Authors: 4
Document type: Journal article
Source: Rev. Econ. Polit.; v. 40, n. 2, p. 285-309, Jun. 2020.
Abstract

ABSTRACT This research seeks to understand the relationship between the rate of profit and the exchange rate and how this relationship can impact the productive structure. We construct a theoretical model in which the exchange rate influences the rate of profit, and we argue that although an overvalued exchange rate could benefit sectors with high imported input coefficients in the short term because it reduces costs, it negatively impacts the demand for their products and also reduces the aggregatedemand; hence, an overvalued exchange rate could shrink the profit rate of these sectors in the medium term. In the Brazilian case, these sectors are the high technological-content manufacturing sectors. (AU)

FAPESP's process: 19/01353-0 - The tendency to the cyclical overvaluation of the exchange rate and its relation with the rate of investment and the structural change in Latin American countries
Grantee:Luiz Carlos Bresser Gonçalves Pereira
Support type: Regular Research Grants