Capital formation and transfer of funds abroad

Vol. 7 No. 1 (1987)

Jan-Mar / 1987
Published January 1, 1987
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Batista Jr., Paulo Nogueira. 1987. “Capital Formation and Transfer of Funds Abroad”. Brazilian Journal of Political Economy 7 (1):8-26. https://doi.org/10.1590/0101-31571987-1010.

Capital formation and transfer of funds abroad

Paulo Nogueira Batista Jr.
Fundação Getúlio Vargas, Rio de Janeiro/RJ, Brasil. Texto baseado em informações disponíveis em princípio de outubro de 1986.
Brazilian Journal of Political Economy, Vol. 7 No. 1 (1987), Jan-Mar / 1987, Pages 8-26

Abstract

This paper analyses the implication of the increasing transfer of resources to
external sector on the capacity of investment of the Brazilian economy. After 1983 Brazilian
economy is transferring an increasing volume of resources which attained more than 5%
of the GDP in the last two years, contrasting with the decade of 70 when the absorption of
external saving attained about 2% of the GCP. As a consequence of this external constraint,
the rate of investment has dropped from 26% of GDP in the 70’s to an estimated level of
16% in the last years. The paper, using a standard macroeconomic model, establishes the
relationship between alternatives rates of transfer of resources, rate of domestic savings, and
capital-output ratio with the target rate of growth of the Brazilian economy.

JEL Classification: F32; F37; F38.


Keywords: Capital flows debt crisis balance of payments