The new neoclassical theory of growth and the problem of Brazilian economic underdevelopment
Abstract
The purpose of the paper is to show that endogenous growth theory is at best insufficient
to explain Brazilian economic underdevelopment. The main reason for this is that
this theory gives a major importance to the role of human capital in the process of economic
growth which is not justifiable in the Brazilian case. Instead of this, the main problem of the
Brazilian economy seems to be the incapacity of its modem sector to absorb the majority
of the population. This cannot be done only through human capital increase; it requires in
first place a major physical investment program in order to enlarge the size of the modem
sector nowadays opened only to a minority of the population which is insufficient to allow
Brazilian economy recovery.
JEL Classification: J20; J24; B50.
Keywords: Endogenous growth model human capital employment determination