What Explains the Decline in Brazil’s Inequality?

Abstract

The economics profession has long debated whether there is a trade-off between growth and equity. Countries that pursued inequality-reducing strategies have been warned that growth will be affected, and hence that poverty increases. The harbingers of doom advocated a growth-focused strategy. Their assumption was that the income of the poor rises in direct proportion to economic growth. The truth is more like this: economies with more equal income distribution are likely to achieve higher rates of poverty reduction than very unequal countries. In this One Pager we consider if this is the case in Brazil.A profissão da economia há muito debatia se existem escolhas conflituosas (trade-offs) entre crescimento