Work

Long-term analysis of Kaldor's law applied to Brazil (1909-2020)

Year: 2025

Type: article

Abstract: Nicholas Kaldor asserts that the industry is a crucial factor in promoting economic growth, suggesting that the sector's increasing returns to scale significantly impact the overall productivity of the economy. This paper assesses the relevance of Kaldor's laws for the Brazilian economy, offering new insights into their applicability through a novel methodological approach. The study contributes to the literature by employing Markov Regime-Switching (MS) models to capture nonlinear dynamics in output, productivity, and employment growth in the manufacturing sector, over a very long-term period (1909–2020). By distinguishing between lower and higher growth regimes, the analysis demonstrates that Kaldor's laws remain valid in the Brazilian context. The findings underscore the industrial sector's critical role in promoting economic growth and enhancing productivity and employment, while revealing significant non-linearities in these relationships.

Source: Structural Change and Economic Dynamics

DOI: 10.1016/j.strueco.2025.03.004

Authors: Natalia I. Doré, Eliane Araújo

Institutions: Universidade do Porto, Universidade Estadual de Maringá

Language: English

Topic: Economic Theory and Policy

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,880