Which industries to stimulate first? estimating the Rio Grande do Sul economy’s post-crisis recovery ability using the eigenvector method

Abstract

This article aims to estimate the post-crisis recovery capacity of the economy of the state of Rio Grande do Sul, identifying which activities could be responsible for driving the state’s economic recovery. The analysis is conducted by the eigenvector method, an input-output analysis technique proposed by Dietzenbacher (1992) that presents certain advantages compared to conventional sectoral linkage methods, which are also calculated and analyzed here. The relevance of this study is related to the context of the recent extreme weather event in the state in April/May 2024 and its impact on economic recovery. The method is also applied to the Brazilian economy to compare the results with those of Rio Grande do Sul. The results highlight
activities that are generally low in technological intensity, relatively important to the state’s production dynamics, being predominantly related to the agroindustrial chain, particularly the biofuels manufacturing, meat products, other food products, footwear and leather goods, beverages, and rubber and plastic products. The results for biofuel manufacturing point to an opportunity to further deeper a sustainable energy transition in the state of Rio Grande do Sul.