Portuguese Economic Journal, 2007, Volume 6, Nº 1
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- Adjustment within the euro. The difficult case of PortugalPublication . Blanchard, OlivierIn the second half of the 1990s, the prospect of entry in the euro led to an output boom and large current account deficits in Portugal. Since then, the boom has turned into a slump. Current account deficits are still large, and so are budget deficits. This paper reviews the facts, the likely adjustment in the absence of major policy changes, and examines policy options.
- The structural transformation and aggregate productivity in PortugalPublication . Duarte, Margarida; Restuccia, DiegoWe document the substantial process of structural transformation— the reallocation of labor between agriculture, manufacturing, and services— and aggregate productivity growth undergone by Portugal between 1956 and 1995. We assess the quantitative role of sectoral labor productivity in accounting for these processes. We calibrate a model of the structural transformation to data for the United States and use the model to gain insight into the factors driving the structural transformation and aggregate productivity growth in Portugal. The model implies that Portugal features low and roughly constant relative productivity in agriculture and services (around 22%) and a modest but growing relative productivity in manufacturing (from 44 to 110%). We find that productivity growth in manufacturing accounts for most of the reduction of the aggregate productivity gap with the United States and that a further closing of this gap can only be accomplished via improvements in the relative productivity of services.
- Business cycle and level accounting : the case of PortugalPublication . Cavalcanti, Tiago V.This paper studies what accounts for the recent business cycles phenomena in Portugal and why it is depressed relatively to the United States. The business accounting procedure applied here suggests that most of the changes in output per worker in Portugal over the period (mainly, from 1979 to 1991) can be attributed to changes in economic effi ciency. For instance, the strong economic recovery in output per worker just after Portugal joined the European Union until the first years of the 1990s can be essentially attributed to improvements in economic effi ciency. From 1979 to 2000, Portugal caught up with the industrial leader. Its output per worker is currently depressed by about 46% relative to the United States level (it was depressed by 57% in 1979). In the 1980s all of this depression in output per worker relative to the United States was due to the productivity factor. By 2000 Portugal depression relative to the United States was a mix of the French and Japanese depression. The labor factor accounted for roughly 24% of this depression, while the economic effi ciency accounted by about 89%.
- Small firms in Portugal : a selective survey of stylized facts, economic analysis, and policy implicationsPublication . Cabral, Luís M.B.I survey a number of stylized facts pertaining to the dynamics of firm entry, growth, and exit in competitive industries. I focus particularly on data for Portugal, although I also consider, for comparison purposes, data from other countries. I then present a series of theoretical models that attempt to explain the stylized facts and evaluate the welfare impact of market distortions. Finally, I derive a number of policy implications, all centered around the notion of economic mobility.