Brazilian economic integration and challenges in the trade balance: An analysis using the classification by broad economic categories

Abstract

The article analyzes the Brazilian trade balance according to the Classification by Broad Economic Categories and tests the stability of import demand using Ordinary Least Squares regressions and Bai and Perron (2003) structural break tests, with monthly data from 1997 to 2023. The results indicate a deterioration in Brazil's integration into international trade, with deficits in sophisticated sectors and surpluses in basic activities. Instability in import demand coefficients is observed during periods of high economic activity and the 2009 crisis. It is concluded that Brazil needs industrial policies to reverse this unfavorable external integration.

JEL Classification: F41; O24; L60; E60.