The recent debate on alternative growth models for Brazil has revealed an almost unanimous assessment regarding the end of the validity of the domestic consumption-led model

Abstract

The recent debate on alternative growth models for Brazil has revealed an almost unanimous assessment regarding the end of the validity of the domestic consumption-led model. In this article, I propose to examine the broader social meaning of this model as well as the empirical soundness of supposed tradeoffs, e.g. between consumption and investment and, in particular, public investment and consumption, and suggest that the assessment unit should include the manifold consumption gaps, e.g. necessary, discretionary and public, that persist in the Brazilian society. The gaps suggest that there still is space for redistribution and expansion of social public goods provision. Exploring the potential of public social services for delivering growth in combination with social equilibrium and social cohesion and sustainability emerges from the analysis as a bet yet to be made. 

JEL Classification: H50; I38.