Macroeconomic determinants of retail sales in Brazil, 2004-2011

This paper performs a panel exercise, including six Brazilian states, to determine the influence on retail sales of three main macro-indicators, such as personal income, unemployment rate and interest rates, in the 2004-2011period, when Brazilian economy showed an expressive economic growth rate. A SUR (seemingly uncorrelated residuals) methodology estimation across Brazilian states was conducted. All results point out that retail sales and personal income are linked contemporarily and, at the same time, elastic. As for unemployment rate and interest rates, despite their significance in most states, both are inelastic to explain retail sales and lagging three months in the macroeconomic context.