ABSTRACT
This chapter discusses the regional impacts on the Brazilian economy of unilateral liberalization and the Mercosul trade agreement that has often lacked formal analytical framework. The specification of linkages between the national and regional economy represents an interesting theoretical issue in regional modeling. The chapter utilizes an interregional computable general equilibrium model to evaluate shifts in the economic center of gravity and regional specialization in the Brazilian economy due to liberal tariff policies undertaken in the early 1990s. The Brazilian Multisectoral And Regional/Interregional Analysis Model is the first fully operational interregional computable general equilibrium (CGE) model for Brazil. The model is based on MONASH-MRF Model, which is the latest development in the ORANI suite of CGE models of the Australian economy. In the Brazilian federalism, states play an important role for many policy purposes, state disaggregation may be required.
