The average income in Brazil has increased 0.9% per year since 1980
Based on Claudio Haddad’s study, Insper traced 119 years of Brazil’s GDP per capita performance
Over the past 40 years, Brazil’s per capita GDP growth corresponded to only half of the US rate for the same period. That pace contrasts with Brazil’s performance during the first half of the 20th century, when the country’s production expanded more rapidly than developed nations such as the US.
In his doctoral thesis (PhD from University of Chicago, 1974), Professor Claudio Haddad presents estimations of Brazil’s GDP growth between 1900 and 1947. The last year of the series marks the moment when the Brazilian national accounts started to be systematically released. Before that year, it there was no official to measurement of the Brazil’s economic performance in terms of GDP growth.
Thanks to Haddad’s seminal series, Insper Conhecimento was able to combine indicators from his study with official national accounts and demographics data that depicts the performance of Brazilian GDP per capita from 1901 to 2019. The rate shown is a five-year moving averages (for a given year is a geometric mean of the previous five-year) to better highlight differences among various periods and compare Brazil’s and US performances.
Haddad’s work is a meticulous reconstruction of Brazil’s Total Production Volume per year, based on information from agriculture, industry, transport, communications and trade sectors, as well as data collected from government bodies. Professor Haddad was the first scholar to show that during the first half of the 20th century, the Brazilian economy radically moved from the stagnation that had prevailed in the 19th century, to rapidly growing rates. The per capita product increased faster in this period than in developed nations – and Brazil started to catch up with the economic progress.
Haddad used statistical estimation techniques to estimate missing data points. The calculation method chosen, based on François Divisia’s work (prominent French economist that lived between 1889-1964), has the advantage of incorporating changes in the bundle of goods produced in the country over the years.
The demographic data is useful in, to see the evolution of the per capita production, a more appropriate indicator to compare Brazil’s economic growth with another nations progress.
When analyzing most of the subperiods within the 119-year timeline, one can see that Brazil outperforms the US in all periods, except for more recent years, from 1980 onwards, when Brazil’s GDP growth is slightly half of the US growth pace.