| The liberalization process of the 1990's in Latin America resulted in the increase and diversification of trade in the region. Brazil, as a major player, strengthened its insertion into the world economy through the adoption of strategies for opening up markets adopting new production technologies, complemented recently by the creation of a broadly-based stabilization plan. In this context, issues related to structural changes in the economy, such as those involving the complexity of new international trading agreements and their impacts on the Brazilian economy, deserve special attention. Brazil's economy is not homogeneous internally, presenting strong variations across regions, sectors, and income groups. Consequently, macro policy changes have differential regional impacts, as well as differential impacts on producers and consumers.;The discussion of regional and sectoral impacts of alternative strategies of regional development in the present macroeconomic context of the Brazilian economy has often lacked a formal analytical framework. Accordingly, the primary analytical focus of this dissertation is to build an interregional computable general equilibrium model (ICGE) for the Brazilian economy. The model is used to capture the role of interindustrial and interregional relations in the economic development process through the evaluation of the regional impact of different economic policies. The choice of the policy simulations to be carried out is heavily motivated by both theoretical and historical relevance in the Brazilian case. Recent contributions to the debate on the pattern and direction of regional income convergence in Brazil in the new cycle of economic growth are considered in the context of macroeconomic, sectoral and structural policies, and their differential impacts on the patterns of regional imbalances.;The results of this dissertation suggest that the interplay of market forces in the Brazilian economy favors the more developed region of the country. In other words, the trickling-down effects generated by market forces are still very unlikely to overtake the polarization effects from the Center-South. If regional equity is part of the country's development agenda, an active regional policy by the central government is still needed, in order to reduce regional economic disparities, and specifically to address the problems of the North and Northeast, traditionally backward areas reliant on low technology activities. |
