Abstract
One of the basic principles guiding the Growth Acceleration Plan (PAC) of the current Brazilian government is the promotion of inclusive, sustainable economic growth that stimulates regional development. With a commitment to reducing CO2 emissions, the Federal Government plans to invest approximately R$ 41.7 billion in the production of clean energy from photovoltaic sources. This commitment is part of a policy aimed at energy transition towards a low-carbon economy. Given Brazil's significant regional income inequality, a policy that directs public investments and encourages private investments in regions with low economic performance aligns with the proposals outlined in the PAC by the Federal Government. Therefore, understanding how investments affect the labor supply of regional economies becomes crucial. This study aims to calculate the impact of PAC investments on final demand and employment across the major Brazilian regions. The analysis starts from an Input-Output model, with shocks to final demand and their effects on the number of workers. The model is based on a multi-regional input-output matrix, disaggregated into 27 Federal Units, 68 sectors, and 5 categories of final demand. For the analysis, a shock was applied to investments equivalent to the Federal Government's projection for photovoltaic energy production, amounting to R$ 41.7 billions The results show that, although investments were more significant in the Northeast region, the greater impact on employment occurs more pronouncedly in the Southeast region. This may indicate income leakage from the Northeast to the Southeast. One hypothesis raised is the existence of a less dynamic economy in the Northeast compared to the Southeast, leading to a trade deficit for the Northeast in favor of the Southeast. Therefore, a regional development policy should go beyond shocks to final demand in the promoted region and should encourage the development of local industries, among other measures. A possible extension of this work involves considering changes in relative prices and shifts in agents' preferences.