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Projeto de investigação
External Competitiveness of the peripheral countries in the Eurozone and the relationship with the economic growth considering the profile of each productive structure, the existing restrictions in the adoption of macroeconomic policies
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Falling labour share and the anaemic growth in Portugal : a post-keynesian econometric analysis
Publication . Alcobia, João; Barradas, Ricardo
In recent decades, the labour share has experienced a downward trend in Portugal that
has occurred at the same time as a weaker and anaemic growth pattern. This seems to suggest
that the fall in the labour share represents an important constraint on Portuguese economic
growth, which does not support the orthodox claims around wage restraint policies as a
necessary condition to improve macroeconomic performance due to their positive effects on
private investment through higher profits and on net exports through lesser unit labour costs and
a corresponding rise in competitiveness. This study assesses the relationship between labour
share and economic growth by performing a time series econometric analysis focused on
Portugal from 1970 to 2020. Findings show that labour share positively impacts economic
growth in Portugal, which is in line with heterodox claims and particularly with post-Keynesian
economics on the beneficial effects on private consumption played by the growth of wages.
Findings also confirm that the Portuguese economy follows a wage-led growth regime instead
of a profit-led growth regime; that is, a rise in wages boosts economic growth because its
beneficial effect on private consumption more than compensates for a prejudicial effect on
private investment and on net exports. The study points out the urgent need to adopt public
policies to support the growth of wages to avoid more decades of dismal growth and a new
‘secular stagnation’ in Portugal.
The Dutch disease of the Euro Area peripheral member states
Publication . Alcobia, João; Cabral, Ricardo
This paper analyzes explanations identified in the literature for the subpar economic
performance of the so-called peripheral member states of the Euro Area since the mid-1990s.
It argues that a key factor was a Dutch disease-like transmission mechanism, as the adoption
of the euro led to a capital inflow shock. This resulted in a structural shift in the productive
structure of the peripheral economies away from technologically advanced manufactured
goods, which are characterized by higher productivity growth. As a consequence, the peripheral
member states specialized in non-tradable sectors, and in low-technology and labor-intensive
tradable goods sectors, which largely explains the peripherals’ low economic growth, low
productivity growth, and growing macroeconomic imbalances.
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Entidade financiadora
Fundação para a Ciência e a Tecnologia
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OE
Número da atribuição
UI/BD/150768/2020