Economic Growth, Poverty and Income Distribution in Brazil Carlos Aguiar de Medeiros

(Paper prepared for the Conference "New Ideas on Development Economics Growth and Distribution Under Financial Globalization". Rio de Janeiro, January, 28 and 29, 2002) What distinguishes Brazilian society today is not only the poverty of 31% of its population – 54 million inhabitants in 2000 - but the extraordinary income gap between the very rich and the poor people . According to the World Bank Indicators for 2001, amongst 152 countries only 5 – Central African Republic, Nicaragua, Sierra Leone, South Africa, Swaziland – have an income Gini index higher than Brazil. This economic contrast in a medium income level…

On Some Common Macroeconomic Fallacies Prabhat Patnaik

Fallacy 1: The interest rate in the Economy is High because the Fiscal Deficit is high The interest rate is the return on a particular asset, namely a debt instrument. It must be determined therefore as part of a stock equilibrium. The fiscal deficit is a flow concept. To say that the interest rate is determined by the size of the fiscal deficit is tantamount to saying that the price of a stock is determined by a flow, which is plain illogical. But, it may be argued, while the fiscal deficit may not determine the interest rate, it certainly affects…