Abstract

FEIJO, Carmem; LAMONICA, Marcos Tostes  and  LIMA, Sergiany da Silva. The Brazilian investment cycle: Financial fragility of the industrial sector. Inv. Econ [online]. 2021, vol.80, n.317, pp.34-57.  Epub Sep 13, 2021. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2021.317.78308.

The 2008 international financial crisis hit the Brazilian economy in the ascending phase of an investment cycle. With a focus on industrial firms and based on Minsky’s definition of gross profit, we present arguments to explain how financial fragility of industrial firms has increased as the macroeconomic context deteriorated in the 2010s. The econometric exercise shows that the financial fragility of industrial firms can be explained by both macroeconomic variables, such as the evolution of credit to investment and interest rate, and sectoral variables, such as the industrial investment, the wage share and the composition of the receipts.

Keywords : Investment cycle; Brazilian economy; financial fragility.

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