DISTRIBUTIVE GROWTH IN BRAZIL: SIMULATING THE IMPACTS OF FISCAL POLICIES USING A MULTISECTOR MODEL

Abstract

The aim of this paper was to analyze the impact of different fiscal policies over the national economic growth and income distribution. The simulations were done using a multi-sector model. The results show the existence of alternative policies, which can, at the same time to promote economic growth and income distribution. Among the applied simulation, the following were identified as promoting a distributive growth. a) to reduce direct tax over poor families and to compensate it risen the direct tax over rich families; b) to increase the government transfers to poor families and to reduce government transfers to rich families; c) to increase the governmental expenditures to poor families and to reduce governmental expenditures to rich families. The results also show that the fiscal policies have a low significant impact over income distribution when compared to the government transfers.