Economic Growth and Volatility: An Analysis for Brazilian States
This paper aims to investigate the effects of volatility on the main fiscal variables of the Brazilian states. In this case, it uses as an explanatory variable the economic growth of the federative entities of Brazil between 1995 and 2016 and observes the way in which the volatility of revenue and expenditure interferes with this.
As a methodological contribution, the work of Afonso and Furceri (2010) is used as a reference. Therefore, instead of evaluating countries and their economic growth, it is decided to verify the Brazilian state sphere and the eventual effects of volatility, both of their revenue and expenditure, and their impacts on the GDP of each one of them. Therefore, it is expected to find the effect of volatilities on the GDP of all Brazilian states and to compare these effects with the current literature on the subject, using the appropriate variables to the study and also to point out which models are most consistent with the Brazilian reality.
It should also be noted that the study will use two or more volatility variables, so as to better explore all the possibilities of this endeavor.