Currency and growth: An analysis for Brazilian municipalities (2000 to 2010)

Abstract:

The aim of this study is to analyze the relationship between regional performance and financial variables for Brazilian municipalities, based on concepts from post-Keynesian theory. Using a cluster multivariate statistical technique we managed to group the municipalities according to their socioeconomic development similarities. As a result, we obtained three groups of municipalities: central, intermediate and peripheral. Using panel data techniques, we assessed the implications of the financial variables and their effects on the level of activity of different groups of municipalities. The results for the period 2000-2010 showed evidence for the hypothesis of differential effects of currency, in a post-Keynesian sense, over level of activity of Brazilian municipalities. Furthermore, this evidence corroborates the results found in a range of applied studies for regional issues in Brazil.

Keywords:
regional performance; post-Keynesianism; credit; currency; uncertainty