Impacts of Changes In Regional Sugar and Ethanol Exports Upon Brazilian Overall Economy

Authors:

Heloisa Lee Burnquist – Universidade de São Paulo

Cinthia Cabral da Costa – Empresa Brasileira de Pesquisa Agropecuária

Joaquim José Martins Guilhoto – Universidade de São Paulo

Abstract: This paper estimates the impact of an increase in Brazilian sugar and ethanol demand for exports upon the countries’ overall production and employment. The impacts were simulated considering each of the major cane producing areas of the country (Center-South and NorthNortheast). An inter-regional input-output matrix for the Brazilian economy was used for that purpose. It was observed that a demand shock, resulting from an expansion of sugar exports presented an impact of greater magnitude upon the countries’ production and employment when compared to the impact from an increase in ethanol. In addition, the results indicated that when the impact is generated at the North-Northeastern Brazil, production and employment is more affected than when it begins at the Center-South region of the country. The result of how the economic benefits are disseminated in the economy is important to identify policies and establish targets for regional production.

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