Coffee exports and industrialization in Brazil

© 2018 Informa UK Limited, trading as Taylor & Francis Group We investigate the dynamic relationship between coffee exports and machinery imports in Brazil from 1869 to 1939. Our tests reveal cointegration and bidirectional causality in the temporal sense. This evidence suggests that foreign exchange real revenues from coffee exports were important for the onset of industrialization, as machinery imports proxy for real investment demand. Capital growth, in turn, also helped to boost the country?s exports.