The long expansion and the profit squeeze: Output and profit cycles in Brazil (1996–2016)

Martins, Guilherme Klein; Rugitsky, Fernando

Abstract

The present paper argues that the recent Brazilian crisis was related to a cyclical profit squeeze that took place between 2009 and 2014, following the long expansion that started in 2003. To do so, the cyclical trajectories of the output and the profit rate in the Brazilian economy for the period between 1996 and 2016 are examined by resorting to the framework established by Weisskopf (1979). The results indicate that profit squeezes are rare in the Brazilian economy, possibly due to the truncated character of the business cycles’ expansions. However, a profit squeeze did take place in the last cycle, partly as a result of the commodities boom, which attenuated the foreign vulnerability of the economy and allowed for a longer than usual expansion. JEL classification: B50, B51,E32

• Journal Article Type: Article
• Acceptance Date: Nov 30, 2020
• Online Publication Date: Mar 22, 2021
• Publication Date: Sep 1, 2021
• Deposit Date: Mar 3, 2022
• Publicly Available Date: Mar 8, 2022
• Journal: Review of Radical Political Economics
• Print ISSN: 0486-6134
• Electronic ISSN: 1552-8502
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 53
• Issue: 3
• Pages: 373-397
• DOI: https://doi.org/10.1177/0486613420982083
• Keywords: cyclical profit squeeze, Brazilian economy, profit rate decomposition, Weisskopf, structuralist Goodwin model
• Public URL: https://uwe-repository.worktribe.com/output/9096154
• Publisher URL: https://journals.sagepub.com/doi/10.1177/0486613420982083