Policy complementarity and conflict in regionally disaggregated macroeconomic models: an example from the brazilian experience

Abstract

In this paper, the interrelated nature of the growth and regional inequality goals is examined. Then we analise the interdependencies between simultaneous pursuit of national growth and regional equality, and the possible complementarity or conflicting results of exogenous events and macroeconomic policies toward those ends. These interdependecies are ilustrated through the use of a simple two-region aggregated demand model. As an application of the previous analysis a case study of Brazil's experience during the 1960's and 1970's is presented.