da Silva, Napoleão Luiz Costa Assunção, Juliano J.
Year of Publication:
Texto para Discussão 2459
In the period 2001-2011, we had a strong increase in private credit in Brazil, which increased from 27.2% to 51.6% of gross domestic product (GDP). In addition, private credit with free resources (with interest rates freely negotiated in the market, without subsidies and without direction) went from 15% to 30% of GDP. Private credit with free resources for firms grew strongly between 2004 and 2008, from around 10% in 2004 to around 15% of GDP in 2008. In this text, we sought to analyze the effects of this increase on private credit with free resources for firms in the percentage of entrepreneurs in the Brazilian economy in the 2004-2008. To do so, we used a version of the neoclassical growth model with heterogeneous agents, credit restrictions and occupational choice, making use of a mixed estimation and calibration approach for the Brazilian economy in 2004 in its implementation. We also simulated the increase in credit for firms with free resources in the period. The results show significant impacts of the credit increase for the firms on the percentage of entrepreneurs in the economy. In the exercise performed, the increase in credit with free resources for firms generated a growth of around 5% in the percentage of entrepreneurs in the total population between 2004 and 2006. Moreover, this increase in access, raised per capita GDP by 2% between 2004 and 2008, in the model. In this case, the rise in credit explains about 13.5% of the rise in GDP per capita in the period.
credit restrictions credit expansion percentage of entrepreneurs total factor productivity GDP per capita heterogeneous agents occupational choice