Estimation of the kaldor-verdoorn’s law to the brazilian industry 2001-2012

Abstract

ABSTRACT This paper estimates the Kaldor-Verdoorn (KV) Law for the industrial sector in Brazil. This law defines a positive relationship between the industrial labor productivity growth rate and its production growth rate. Statistics from IBGE and Ipeadata in the period 2001 to 2012 serve as data sources for the estimation. We estimate the KV law through an error correction model (MCE). The results suggest the existence of static and dynamic economies of scale in the Brazilian industry. However, the results reveal a decrease in its sectoral dynamics and a lack of capability to incorporate productivity gains. Key words: Artigo recebido em 03 jan. 2013.