The impact of Pronaf for investment and costing on the aggregate demand of the Brazilian economy

Abstract

Given the relevance of PRONAF (Family Agriculture Strengthening Program) for agriculture as a whole, the present study aims to measure the impact that credit for cost and investment provided by such program has on the Brazilian aggregate demand . In order to fulfill this objective, an IS curve was constructed, within the New Macroeconomic Consensus this curve is used to represent the aggregate demand and the estimation was performed via autoregressive Vectors with Error Correction in its structural version (SVEC). As a result, it was obtained that the credit provided by PRONAF for both funding and investment has some impact on the aggregate demand of the country, being the one originating from investment credit, a little more durable.