Economic growth and regional disparities: A long-term perspective for the state of Sergipe, Brazil

This paper aims to build and evaluate long-term scenarios within the economy of the state of Sergipe so as to identify sectors with a greater capacity to leverage the state's economic growth and mitigate regional disparities. We use a dynamic and inter-regional CGE model, calibrated for the year 2015 and 41 sectors. Our simulations capture he effects of sectorial shocks in the state and explore the direct and indirect effects of such shocks throughout the economy. The main results show that sectors such as Agriculture, Transport, Financial intermediation, and Public Utility Industrial Services all have an above average impact on the state’s GDP and contribute to a reduction in regional disparities. • We evaluate long-term scenarios within the economy of the state of Sergipe. • Our simulations capture he effects of sectorial shocks and explore the direct and indirect effects throughout the economy. • We identify sectors that have above average impact on the GDP and contribute to a reduction in regional disparities. • Our results can be used to guide public policies to stimulate economic growth in the state.