TD NEREUS 01-2023
Carlos R. Azzoni and Gustavo H. L. Castro
The paper deals with the effects of two recent crises on regional disparities in Brazil. We consider the impact of The Great Recession of 2008 and a more intense national crisis starting in 2014. We calculate the yearly average latitude and longitude weighted by the regional share of the national GDP between 2002 and 2019 for agriculture, manufacturing, commerce & services, government, and the aggregate value added. We analyze the evolution of the average latitude and longitude over the period to check for changes in their trends after the national shocks. We analyze per capita income dispersion and associate it with the national economic performance. We estimate convergence equations, introducing the effect of the two crises on the convergence of per capita income and average wage. We present the effect of the Covid-19 crisis on regional wage convergence. Finally, we analyze the convergence pattern of skill intensity across regions, highlighting the impacts caused by the two shocks.