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St Catharine's Political Economy Seminar Series


Date: TBC
Time: 18:00 -19:30
Speaker: Fernando Rugitsky 
Talk Title: 'The long expansion and the profit squeeze: output and profit cycles in Brazil'
Location: Senior Combination Room, St Catharine's College

The seminar series is supported by the Cambridge Journal of Economics and the Economics and Policy Group at the Cambridge Judge Business School.

Fernando Rugitsky is a faculty member at the Department of Economics of the University of São Paulo (Brazil) and is currently a Visiting Scholar at the Centre of Latin American Studies at the University of Cambridge. 

He is also a Principal Investigator of Mecila (Maria Sibylla Merian Centre Conviviality-Inequality in Latin America). He obtained his PhD in Economics at The New School for Social Research (USA) and is currently researching the connections between economic growth, income distribution and structural dynamics (shifting output and employment compositions) in the recent trajectory of Brazil. His works have been published, in English, Portuguese, and Spanish, in peer-reviewed journals (for example, the Cambridge Journal of Economics and the Review of Keynesian
Economics) and edited books. In 2018, he received an honourable mention in an international essay contest promoted by the Economic Commission for Latin America and the Caribbean for the occasion of its 70th anniversary.

Talk Overview:
The aim of the contribution is to the understanding of the recent Brazilian crisis by arguing that it was related to a cyclical profit squeeze that took place between 2009 and 2014. To do so, the cyclical trajectories of output and profit rates in the Brazilian economy, throughout five business cycles (between 1996 and 2016), are examined by resorting to the framework established by Weisskopf (1979). 

The results indicate that profit squeezes are rare in the Brazilian economy, possibly due to the truncated character and the weakness of the business cycles' expansions. Such short expansions do not last long enough to bring unemployment rates sufficiently down in order to strengthen workers to the point that allow them to squeeze profits.
However, a profit squeeze did take place in the last cycle, partly as a result of the commodities boom; the latter allowed for a longer than usual expansion. It is plausible that the magnitude of the political and economic collapse that followed it, from 2014 onwards, can be, at least partly, attributed to the fact that it was the compounded result of a foreign shock and a profit squeeze.

Wednesday, 27 October, 2021 - 18:00 to 19:30