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The relationship between economic growth and inequality in Brazil considering socioeconomic policy changes, 1992-2012

Onbaşı, Nilay
Brazil is an interesting case to examine the relationship between economic growth and inequality. Obviously, it is one of the states to develop gradually over the last decades and be expected to be a rich state in the future. On the other hand, for centuries, it has had huge individual and regional inequalities. However, with economic growth in the last decades, inequality in Brazil has started to decline. For this topic, Simon Kuznets is one of the most famous economists. He basically argued that at the beginning, economic growth leads to inequality. However, after reaching a certain welfare level, inequality starts to decline. In this point, I examined whether inequality in Brazil began to decrease with economic growth or not; because although the Brazilian economy started to grow many times, its inequality had never decreased. Instead of decreasing, its inequality had increased. In contrast, during the period of the Cardoso and Lula governments, inequality began to decrease in Brazil because its socioeconomic policies changed. It is true to say that in the last twenty years, especially both with Cardoso and Lula, Brazil changed its economic policies and started to use neoliberal policies. In addition, Brazil started to focus more on social assistance programs. So, I examined whether socioeconomic policy changes have any effect on the decrease of inequality or not. I reached the conclusion that inequality in Brazil starts to decrease with socioeconomic policy changes which also increase the growth of its economy.