| Disenchantment with the Washington Consensus has led to an emphasis on growth diagnostics. In the case of Brazil, the literature suggests three main factors impeding growth: low domestic savings, a shortage of skilled workers, and lack of investment in the country’s transportation infrastructure. The unique contribution of this study is to show the inter-temporal implications of relaxing these constraints. We fit a multi-sector Ramsey model to Brazilian data, validate its fit to times data, and provide empirical insights into the economy’s structural transformation to long-run equilibrium. Then, the sensitivity of these results to relaxing each of these three constraints is investigated in a manner that yields the same long-run level of well- being.... |
