اثرات سیاست های نرخ بهره و نرخ ارز بر روی صادرات برزیل Effects of interest and exchange rate policies on Brazilian exports

۱٫ Introduction The industrialsector is considered strategic for the development of capitalist economies, through economies ofscale, its development raises the productivity of the economy and contributes to the catching-up process of the technological development of the country (McCombie and Thirlwall, 1994). According to Kaldorian assumptions, the industrial sector is responsible for leading the economy to the stage of economic maturity. Associated with this discussion is the question of productive structure. The more diverse the latter is, the greater the share of high-technology sectors, as well as the economic performance and competitiveness of country. Consequently, there is also an improvement in output growth capacity, since this economy could relax the restrictions associated to growth with external balance. Industrial goods are characterized by having coefficients of exports income elasticity higher than the output of primary sectors. More specifically, the expansion of exports reflects the performance of the most competitive sectors of the economies. Among these, noteworthy is the influence of the industrial sector, since this is an important diffuser agent of technology, responsible for generating external economies and linkage effects on the others (Kaldor, 1968). This relationship between the productive structure and the economic growth was expressed by Thirlwall (1979), who showed that no country can grow faster than the rate compatible with balance of Balance of Payments (BOP). In this context, changes in the exports – to minimize the participation of the industrial sector – have negative effects on the productive dynamic, and consequently for the economic development. The analysis of series of exports made by SECEX/MDIC, in the period from 1996 to 2010, provide some evidence on the changes in the total exports of the Brazilian economy. Industrial goods lost sixteen percentage points in total exports in the period 2003–۲۰۱۰٫ And in relation to the participation of each component classified by technological intensity, we can note that high-tech industrial goods accounted for about 12% in 2000, representing approximately 4.6% in 2010. On the other hand, medium-high and medium-low technology industrial goods, which kept their share in approximately 23% and 19% in the period 1996–۲۰۰۷, recorded a reduction to 18% and 14.6%, respectively, of total exports in 2010. Lower technology goods have a downward trend over time of approximately 10 percentage points. In turn, non-industrial goods had an upward trend over the period and accounted for 36.4% of total exports in 2010. These evidences awaken the need to deepen discussions on the effects of this process, specially, of the loss of share of the manufacturing sector in the total exports of the Brazilian economy. The economic literature suggests that the loss of representativeness of the industrial sector in exports from Brazil is associated with the effects of overvaluation of the real exchange rate, recorded since 2003, and this process would have occurred through the maintenance of a very high nominal rate of interest. The differential between domestic and international interest rates attractsspeculative capital, which, in turn, contributesto the valuation of the exchange rate. It is further argued that the growth trajectory of exports of primary goods would be contributing to the appreciation of the real exchange rate, which reinforces the negative effects on the manufacturing sector. In recent years, the overvaluation movements of the exchange rate have been reflected in the loss of external competitiveness of the industrial sector and, consequently, in investment decisions, considering the uncertainty of expected profits, which, in turn, block the channel of technical progress and increased productivity of the country. Specifically, with regard to the role of the exchange rate policy, on the one hand, the level of the exchange rate is a key price for developing countries, therefore, when defining the profitability of production by the ratio of prices between tradable and non-tradable goods, the exchange rate directly affects the definition of viability economic of sectors that can leverage the growth of overall productivity of the economy (Gala and Mori, 2009). Accordingly, the maintenance of appreciated exchange rates prevents the transfer of employees to the most dynamic sectors of high productivity, since the prices of non-tradable goods are artificially high. This implies low incorporation and small development of technical progress, as well as in maintaining high levels of unemployment or underemployment of labor in low productivity activities and therefore low incomes, which affects the absorption capacity (demand) of the economy. On the other hand, the variability of the exchange rate also affectsindustrial competitiveness,since uncertainty about the exchange rate behavior affects investment decisions. Davidson (2002) argues that fluctuations in the exchange rate affect the competitive position ofthe domestic industry and limit its external insertion, given the uncertainty that impedes the calculation of the potential profitability, the entrepreneurs end up postponing investment decisions. Thus, these fluctuations impose negative effects on trade and investments, especially for developing economies. This determines the economic dynamism of a country and affects its long-term growth. However, for the economy to grow enough in the long term, it is essential thatsuch productive structure isformed by a competitive exportsector, especially regarding the export of products technology-intensive due to the higher income-elasticity of demand for exports associated with them. In this context, the aim of this paper is to show the impact of changes in monetary and exchange rate policy, and changes in the composition of exports on the performance of Brazilian economy. In order to do so, we developed a model based in structuralist approach, considering the financial flows. The choice for this approach is due to the possibility of including an investment equation independent of savings, in addition to allowing the use of nominal variables that enable the analysis of the interrelationships between the real and financial sides of the economy. This would not be possible to be modeled when considering only those changes in real flows and investments derived from the level of savings, such as the neoclassical models. Model calibration was made from the Financial Social Accounting Matrix (SAM) developed for the base year 2003, and the links between the real side and the financial sector are held by an intermediation fund responsible for flows of capital income among agents. This simplification was necessary because of the non-availability of disaggregated data of portfolios, but this limitation does not affect the objectives of this study. This paper is structured in five sections, the first being this introduction. Section 2 briefly presents the relationship between the industrial sector and economic growth. Next, it presents the analytical model calibrated for the study. Section 4 presents the simulated results and, finally, the main conclusions.