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Abstract
This paper estimates the impact of an increase in Brazilian
sugar and ethanol demand for exports upon the countries’ overall
production and employment. The impacts were simulated considering
each of the major cane producing areas of the country (Center-South
and North-Northeast). An inter-regional input-output matrix for the
Brazilian economy was used for that purpose. It was observed that a
demand shock, resulting from an expansion of sugar exports presented
an impact of greater magnitude upon the countries’ production and em-ployment when compared to the impact from an increase in ethanol. In
addition, the results indicated that when the impact is generated at the
North-Northeastern Brazil, production and employment is more affected
than when it begins at the Center-South region of the country. The result
of how the economic benefits are propagated, is important to identify
policies and establish targets for regional production.