Brazil: capital goods industry during the 2003-2008 boom and following the global crisis Guilherme Riccioppo Magacho ABSTRACT The capital goods industry is essential for technological development and long-term economic growth without external restrictions. After a long period of stagnation, investment growth resumed in Brazil in 2003 and brought renewed vigor to the capital goods industry. Nevertheless, the industry is very diverse, and some sectors have failed to meet rising demand where others have succeeded, namely those with high technological potential such as suppliers of machinery for the oil, mining and construction industries and makers of transportation and electrical generation and distribution equipment. Those sectors continued to expand even in the wake of the 2008 global crisis and have been barely touched by foreign competition. KEYWORDS Industry, capital goods, industrial development, industrial policy, Brazil JEL CLASSIFICATION J60, O14, F14 AUTHOR Guilherme Riccioppo Magacho has a doctorate in Land Economy from Cambridge University, United Kingdom of Great Britain and Northern Ireland.
[email protected] 102 CEPAL REVIEW 119 • AUGUST 2016 I Introduction The capital goods industry manufactures the machinery rates), the machinery and equipment manufacturing needed to produce other goods, which makes it essential for industry experienced a third disruption with the cycle economic development. This industry plays an important of economic expansion that began in 2003. The ensuing role in disseminating technological progress —while boom years have appeared to reverse the stagnation trend also bringing technology users closer to producers— that had lasted for at least two decades, ushering in a and is vitally important to the technological progress considerable increase in investment and, by extension, of an economy (Lundvall, 1988).