Using uncertainty regional shocks to assess the relationship between Covid- 19 crisis and economic regional cycles in Brazil
DOI:
https://doi.org/10.1590/1980-53575533mjoKeywords:
Covid-19, Cycles, UncertaintyAbstract
We estimate the effects of COVID-19 on regional economic cycles through uncertainty shocks, using quarterly data (from 2007 to 2022) for 13 Brazilian federative units. The results point to heterogeneity in two ways: persistence of simulated shocks and output recovery speed. Consequently, we found evidence supporting the hypothesis of asymmetric reactions, a feature directly related to resilience over external idiosyncrasies. Therefore, our analysis indicates that the states that react less to external shocks are most likely to recover quickly compared to more susceptible regions.
Downloads
References
Allais, M. 1953. “Le comportement de l’homme rationnel devant le risque: Critique des postulats et axiomes de l’ecole americaine”. Econometrica. 21 (4): 503–546. https://doi.org/10.2307/1907921
Altig, D., S. Baker, J. M. Barrero, N. Bloom, P. Bunn, S. Chen, S. J. Davis, J. Leather, B. Meyer, E. Mihaylov, P. Mizen, N. Parker, T. Renault, P. Smietanka, and G. Thwaites. 2020. “Economic Uncertainty Before and During the COVID-19 Pandemic”. Journal of Public Economics. 191 (104274): 2-13. https://doi.org/10.1016/j.jpubeco.2020.104274
Andolfatto, D. 1996. “Business cycles and labor-market search”. The American Economic Review. 86 (1): 112–132. https://www.jstor.org/stable/2118258
Anscombe, F. J. and R. J. Aumann. 1963. “A definition of subjective probability”. The Annals of Mathematical Statistics. 34 (1): 199–205. https://www.jstor.org/stable/2991295
Baker, S. R., N. Bloom, and S. J. Davis. 2016. “Measuring Economic Policy Uncertainty”. The Quarterly Journal of Economics. 131 (4): 1593–1636. https://doi.org/10.1093/qje/qjw024
Barbosa, R. and E. Zilberman. 2018. “Os Efeitos da Incerteza sobre a Atividade Econômica no Brasil”. Revista Brasileira de Economia. 72 (2):144-160. http://dx.doi.org/10.5935/0034-7140.20180007
Bernanke, B. S. 1983. “Irreversibility, Uncertainty, and Cyclical Investment”. The Quarterly Journal of Economics.98 (1): 85–106. https://doi.org/10.2307/1885568
Cascaldi-Garcia, D. 2022. “Pandemic Priors”. International Finance Discussion Paper #1352: 1-23. https://doi.org/10.17016/IFDP.2022.1352
Costa Filho, A. E. 2014. “Incerteza e Atividade Econômica no Brasil”. Economia Aplicada. 18 (3): 421–453. https://doi.org/10.1590/1413-8050/ea607
Cruz, F. I. L. and J. Colombo. 2018. “Ciclos de Negócios na Construção Civil: Elaboração e Análise de Indicadores Compostos Coincidentes da Atividade Econômica Nacional e Regional do Setor”. Ensaios FEE. 38 (4): 733–772
Cuaresma, J. C., M. Feldkircher, and F. Huber. 2016. “Forecasting with Global Vector Autoregressive Models: A Bayesian Approach”. Journal of Applied Econometrics. 31 (7): 1371–1391. https://doi.org/10.1002/jae.2504
Cunha, A. B. and L. P. Moreira. 2006. “Ciclos Econômicos Regionais no Brasil de 1985 a 2002: Uma Introdução”. Revista de Economia Contemporânea. 10 (1): 115–138. https://doi.org/10.1590/S141598482006000100005
Dees, S., F. Di-Mauro, H. Pesaran, and L. V. Smith. 2007. “Exploring the International Linkages of The Euro Area: A Global VAR Analysis”. Journal of Applied Econometrics. 11(4): 1-38. https://www.jstor.org/stable/25146503
Di-Mauro, F. and M. Pesaran. 2013. The GVAR Handbook: Structure and Applications of a Macro Model of the Global Economy for Policy Analysis. Oxford. https://doi.org/10.1093/acprof:oso/9780199670086.001.0001
Donadelli, M. 2015. “Google Search-Based Metrics, Policy-Related Uncertainty and Macroeconomic Conditions”. Applied Economics Letters. 22(10): 801–807. https://doi.org/10.1080/13504851.2014.978070
Ellery-Junior, R. and V. Gomes. 2005. “Ciclo de Negócios no Brasil Durante o Século XX: Uma Comparação com a Evidência Internacional”. Economia 6 (1): 45–66.
Ellsberg, D. 1961. “Risk, Ambiguity, and The Savage Axioms”. The Quarterly Journal of Economics. 75 (4): 643–669. https://doi.org/10.2307/1884324
George, E. I., D. Sun, and S. Ni. 2008. “Bayesian Stochastic Search for VAR Model Restrictions”. Journal of Econometrics. 142 (1): 553–580. https://doi.org/10.1016/j.jeconom.2007.08.017
Gilboa, I. and D. Schmeidler. 1989. “MaxMin Expected Utility with Non-Unique Prior”. Journal of Mathematical Economics. 18 (2): 141-153. https://doi.org/10.1016/0304-4068(89)90018-9
Godeiro, L. L. and L. R. R. O. Lima. 2017. “Medindo Incerteza Macroeconômica para o Brasil”. Economia Aplicada. 21(2): 311–334. http://dx.doi.org/10.11606/1413-8050/ea156958
Gomes, G. M., C. Osorio, and J. F. Irmão. 1986. “Políticas Recessivas, Distribuição de Renda e os Mercados Regionais de Trabalho no Brasil: 1981-1984”. Anais do V Encontro Nacional do ABEP.
Guimarães Neto, L. 2011. “Ciclos Econômicos e Desigualdades Regionais no Brasil”. Cadernos de Estudos Sociais. 14 (2). Recuperado de https://periodicos.fundaj.gov.br/CAD/article/view/1228
Haddad, E. A., C. A. Gonçalves Júnior, and T. O. Nascimento. 2018. “Matriz Interestadual de Insumo Produto para o Brasil: Uma Aplicação do Método IIOAS”. Revista Brasileira de Estudos Regionais e Urbanos. 11(4): 424–446.
Haddad, P., C. Ferreira, S. Boisier, and T. Andrade. 1989. Economia Regional: Teorias e Métodos de Análise. ETENE-BNB.
Hamilton, J. D. 2018. “Why You Should Never Use the Hodrick-Prescott Filter”. Review of Economics and Statistics. 100 (5):831–843. https://doi.org/10.1162/rest_a_00706
Jurado, K., S. C. Ludvigson, and S. Ng. 2015. “Measuring Uncertainty”. American Economic Review. 105 (3), 1177–1216.http://doi.org/10.1257/aer.20131193
Knight, F. 1921. Risk, Uncertainty and Profit. Houghton Mifflin, Boston.
Leduc, S. and Z. Liu. 2016. “Uncertainty Shocks are Aggregate Demand Shocks”. Journal of Monetary Economics. 82, 20–35. https://doi.org/10.1016/j.jmoneco.2016.07.002
Lenza, M. and G. E. Primiceri. 2022. “How to Estimate a VAR After March 2020”. Journal of Applied Econometrics. 37 (4): 688-699. https://doi.org/10.1002/jae.2895
Litterman, R. B. 1986. “Forecasting with Bayesian Vector Autoregressions – Five Years of Experience”. Journal of Business & Economic Statistics. 4 (1): 25–38. http://doi.org/10.1080/07350015.1986.10509491
Mussolini, C. C. and V. Teles. 2012. “Ciclos Reais e Política Fiscal no Brasil”. Estudos Econômicos. 42 (1): 75 96. https://doi.org/10.1590/S0101-41612012000100003
Pereira, R. M. 2001. “Investment and Uncertainty in a Quadratic Adjustment Cost Model: Evidence from Brazil”. Revista Brasileira de Economia. 55 (2): 283–311. https://doi.org/10.1590/S0034-71402001000200006
Savage, L. J. 1954. The Foundations of Statistics. New York: Dover Publications.
Schmeidler, D. 1989. “Subjective Probability and Expected Utility Without Additivity”. Econometrica. 57 (3): 571–587. https://doi.org/10.2307/1911053
Silva Filho, T. N. T. 2007. “Is the Investment-Uncertainty Link Really Elusive? The Harmful Effects of Inflation Uncertainty in Brazil”. Banco Central do Brasil, Working Paper Series (157).
Souza, M., S. Caetano, and U. Zabot. 2019. “Dinâmica e Transição da Incerteza no Brasil: Uma Investigação de Autorregressão Quantílica”. Estudos Econômicos. 49 (2): 305-335. https://doi.org/10.1590/010141614924mus
Souza, M. C., R. Cunha, and J. Duarte. 2022. “Os Efeitos de Choques Fiscais e de Produtividade sobre os Ciclos Econômicos de Minas Gerais”. Pesquisa e Planejamento Econômico. 52 (2): 219–246. http://dx.doi.org/10.38116/ppe52n2art7
Tversky, A. and D. Kahneman. 1992. “Advances in Prospect Theory: Cumulative Representation of Uncertainty”. Journal of Risk and Uncertainty. 5: 297–323. https://doi.org/10.1007/BF00122574
Val, P. R. C. and P. Ferreira. 2001. “Modelos de Ciclos Reais de Negócios Aplicados à Economia Brasileira”. Pesquisa e Planejamento Econômico. 31 (2): 213–248
Von-Neumann, J., O. Morgenstern, and A. Rubinstein. 1944. Theory of Games and Economic Behavior. (60th Anniversary Commemorative Edition). Princeton University Press.
Published
Issue
Section
License
Copyright (c) 2025 Michel Candido Souza, Jean Lucas Viana Almeida, Otávio Florentino Detoni
This work is licensed under a Creative Commons Attribution 4.0 International License.
By submitting an article, the author authorizes its publication and attests that it has not been submitted to any other journal. The original article is considered final. Articles selected for publication are proofread for grammatical and orthographic errors. The journal does not pay rights for published articles. The Institute of Economic Research from the School of Economics, Business and Accounting of the University of São Paulo (Instituto de Pesquisas Econômicas da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo) owns the journal's copyright.
Atualizado em 14/08/2025