Brazilian Inequality and Trade Liberalization between Brazil and China and between Brazil and United States
DOI:
https://doi.org/10.5433/2317-627X.2024.v12.n2.48647Keywords:
Trade liberalization, Income Inequality, PAEGAbstract
This study evaluated the possible effects of a trade liberalization agreement between Brazil and the United States (US), and between Brazil and China on inequality in income, welfare, and consumption of Brazilian households. We used the General Equilibrium Analysis Project (PAEG), a model of the Brazilian economy that divides the country into five macro-regions and categorizes households into ten income groups by region. The findings suggest that eliminating trade tariffs between the US and Brazil tends to decrease income inequalities in underdeveloped regions while increasing them in developed regions. Similarly, eliminating trade tariffs between China and Brazil tends to amplify income inequalities in underdeveloped regions and alleviate them in developed regions. Moreover, Brazilian households experience greater gains in welfare and consumption as a result of the removal of trade tariffs between China and Brazil.This study contributes to the ongoing debate on the relationship between trade liberalization and inequality in Brazil.
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Copyright (c) 2023 Abdoulaye Aboubacari Mohamed, Rayan Wolf, Sepúlveda, Michael
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