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CEPAL Review

Cepal Review is the leading journal for the study of economic and social development issues in Latin America and the Caribbean. Edited by the Economic Commission for Latin America, each issue focuses on economic trends, industrialization, income distribution, technological development and monetary systems, as well as the implementation of economic reform and transfer of technology. Written in English and Spanish (Revista de la Cepal), each tri-annual issue offers approximately 12 studies and essays undertaken by authoritative experts or gathered from conference proceedings.

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Do demand and profitability stimulate capital accumulation? An analysis for Brazil

This article tests whether the profit share of GDP and capacity utilization affect capital accumulation in Brazil in the period 1950-2008 (in the sense of Granger causality). The methodology developed by Toda and Yamamoto (1995) is used to verify the Granger non-causality hypothesis. The results show that capacity utilization “Granger-causes” capital accumulation in the Brazilian economy and, also that the profit share of GDP does not “Granger-cause” the national investment-capital ratio. This corroborates the Kaleckian proposal based on the fundamental role of the accelerator, and suggests that the Brazilian economy can grow with either a concentration or a de-concentration of income, provided a suitable institutional arrangement is in place.

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