The myth of post-reform income stagnation in Brazil
By: prepared by Irineu de Carvalho Filho and Marcos Chamon.
Contributors: Chamon, Marcos.; International Monetary Fund. Research Dept.; International Monetary Fund. Western Hemisphere Dept.
Series: IMF working paper -- WP/06/275
Publisher: International Monetary Fund, Western Hemisphere and Research Depts.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 34
Subjects: Income -- Brazil -- Econometric models.; Consumer price indexes -- Brazil -- Econometric models.; Brazil -- Economic conditions -- 1985- -- Econometric models.; Brazil -- Economic policy -- Econometric models.
Description: This paper uses Engel curves to estimate real income growth in Brazil. The estimated per capita household real income growth in metropolitan areas during 1987-2002 is about 4 1/2 percent per year, well above the "headline" growth of 1 1/2 percent obtained by deflating nominal incomes by the CPI. This suggests a substantial CPI bias during that period, likely owing to one-off effects of trade liberalization and inflation stabilization. The estimated unmeasured gains are higher for poorer households, implying a marked reduction in "real" inequality. This finding challenges the conventional wisdom that post-reform real income growth in Brazil was low.
Notes: Caption title.

"December 2006."

Includes bibliographical references (p. 33-34).

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