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Income transfer and the dynamics of economic growth: a simulation model

The purpose of this paper was to elaborate a theoretical model of simulation in order to verify the effects of income transference policies over the economic growth dynamic, following a structuralist approach. The main basis of the simulation is the export-led growth model, of the Kaldorian type. Five scenarios were drawn considering income distribution policies, with and without direct income transfer policy by the government. The scenario that better adjusts the income redistribution with increased rate in the long-term growth is part of the group "without transference" policy. In the short-term the major growth rates were obtained in a group scenario "with income transference". The main conclusion is that there is a trade-off between the redistribution policies in such a way that those which are more beneficial to the macroeconomic environment in the short-term cannot be the best ones in the long-term, and vice versa.

income distribution; economics growth; simulation


Departamento de Economia; Faculdade de Economia, Administração, Contabilidade e Atuária da Universidade de São Paulo (FEA-USP) Av. Prof. Luciano Gualberto, 908 - FEA 01 - Cid. Universitária, CEP: 05508-010 - São Paulo/SP - Brasil, Tel.: (55 11) 3091-5803/5947 - São Paulo - SP - Brazil
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