This paper examines the role of productivity shocks in the context of real business cycles (RBC) for Brazilian agriculture. The productivity shocks were subdivided into two types, shocks due to supply variations and productivity shocks arising from technological advances or shocks total factor productivity (TFP). The proposed model is based on a RBC Small Open Economy Model. The model estimation was made using calibration techniques in addition with Bayesian econometric techniques. The results showed that a greater degree of indebtedness of the Brazilian agricultural sector would generate a higher capital stock, which could have improved the agricultural economic performance.
