Brazil and China: Two Routes of Economic Development

Available from: 
March 2015
Paper author(s): 
Laura Policardo
Lionello F. Punzo
Edgar J. Sánchez Carrera
Topic: 
Macroeconomics - Economic growth - Monetary Policy
Year: 
2015

We look at two emerging economies, Brazil and China, and propose an evaluation of their recent development in terms of growth performance and the evolution of income inequality. Our analysis therefore seems to be related to the well known Kuznets-curve and theory. The latter, however, populates an inequality-growth plane with countries’ average-valued coordinates and draws far fetching predictions that have been repeatedly questioned. We claim that Kuznets’ traditional approach does not capture recent relevant phenomena characterizing such countries: namely, the presence of at least two distinct growth models. Empirical evidence and Cointegration analysis corroborate such results.

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