Productivity, real wages, unemployment and inflation: an empirical analysis and perceptions of the Brazilian automotive sector

Abstract

Brazil is a developing economy that has faced one of the deepest economic recession in recent years and it side-effects were felt in the automotive sector (one of the most essential industries in the country). As a result, the sector has lost the lead as the main automotive producers in Latin America. This research examines the degree of relationship between productivity, real wages, unemployment and inflation and capture perceptions of the Brazilian automotive sector. Considering the statistical assumptions and the research constraints, results have shown that productivity is positively associated with real wages and inflation whereas a negative association was felt with unemployment. Perceptions collected on the automotive sector have shown that the industry is essential for the Brazilian economic development creating many direct and indirect employment. The biggest entrepreneurial challenges such as the complexity of the tax system, lack of transport infrastructure and the amount of tax paid were mentioned as the main responsible reason for struggling the sector.