Rising commodity prices and welfare in Brazil. A simulation of medium-term using a SAM price model.

BARONE SERGIO VICTOR

International journal of Emerging markets

Yorkshire: Esmerald Publishing

Año: 2019

1746-8809

urposeBrazil, a large developing economy whose main exports consist of primary commodities, benefited greatly of the boom in commodity prices during the first decade of the current century. However, with a large share of its population with low and very-low incomes, there is the potential for some adverse redistributive effects. We address this issue by simulating the ex-ante effects using a mixed endogenous-exogenous SAM price model.Design/methodology/approachThe methodology consists of two parts. Firstly, using a mixed endogenous-exogenous SAM price model we obtain the elasticities of domestic prices (goods, services, and factors) in response to the increase in international prices of three types of commodities: agricultural, oil/gas, and minerals. Secondly, we run micro-simulations at the household level on welfares effects, as well as on some distributive indices. An analysis at the regional level is also carried out.FindingsFollowing an increase in the international prices of pri