Research Paper - The Middle-Income Trap and Resource-Based Growth: the Case of

One feature though must be highlighted in the case of Brazil: the transition from low- to middle-income types of labor occupancy and economic structure deaccelerated before the end of the period of ‘low-hanging fruit’ because of fragilities associated with the trade and macroeconomic policies pursued (Canuto, 2013). [...] The negative trend in TFP has worsened over the years, particularly during the 2010s, and the elimination of the contributions of IT and non-IT capital during 2021-2023 is a significant concern. [...] The second term on the RHS refers to the static structural change, and reflects the change in productivity brought about by the sectoral gain or loss in employment, assuming there is no change in productivity over the period. [...] The source of the productivity gains was the regular reallocation of labor and capital to the most- productive industries, resulting in the contraction of low-productivity sectors and expansion of high-productivity ones. [...] In Brazil, recent changes—for example, in the kind of information that is made available to creditors and in the bankruptcy law—improved the country’s position in the rankings in the last report in 2020.