Rising commodity prices and welfare in Brazil. A short-run analysis using a SAM price model
Date
2017-11Author
Moncarz, Pedro Esteban
Barone, Sergio
Descalzi, Ricardo Luis
Metadata
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During the 2000's, and from a macro perspective, Brazil benefited greatly because the increasing prices of agricultural commodities in world markets, as well as the price of oil and other primary commodities, which the country exports intensively. However, because the impacts these commodities might have on consumer prices, it is possible to envisage
redistributive effects. We model the responses of consumer and factor prices using a Social Accounting Matrix model, which can be adapted to develop a price model that captures the interdependences among activities, households and
factors. An advantage of the proposed methodology is, among others, that it allows us to estimates a full set of effects, including changes in government transfers and payments by social security. The results show that following an increase in the international prices of primary commodities, the responses of internal prices, of goods and factors, mean a welfare loss over the entire household per capita expenditure distribution, with those in the middle being the least affected. However, the differences among households are not very important. Inequality indices show little responsiveness to the simulated shocks.