Title: The myth of post-reform income stagnation in Brazil
First published: 2006
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.
Subjects: Econometric models, Economic policy, Consumer price indexes, Economic conditions, Income
Places: Brazil
Time periods: 1985-