Growth Performance in Portugal Since the 1960’s: A Simultaneous Equation Approach with Cumulative Causation Characteristics
AbstractThe aim of this paper is to explain growth performance in Portugal in the last decades through a multi-equation system with cumulative growth characteristics. The model uses a demand-orientated approach to determine the main relationships which explain growth through a virtuous cycle. The idea is to identify the driving forces of growth with causal linkages and feedback tendencies that turn the process self-sustained. The multi-equation growth model is estimated by 3SLS to capture more efficiently the interrelations between the main growth forces and to control for the endogeneity of the regressors. Our evidence shows that the proposed model can successfully be used to explain the Portuguese growth performance, highlighting the importance of exports competitiveness as the key factor in this process. The cumulative growth process can be interrupted at some points mainly due to the incapacity of transferring productivity gains into domestic prices and to turn the economy more competitive. Capital accumulation is also shown not to affect productivity growth and domestic prices not to improve exports competitiveness. These are the main drawbacks of the Portuguese economy that could explain the failure to achieve higher growth rates in the last decades.
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Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2011-06.
Length: 31 pages
Date of creation: Mar 2011
Date of revision:
Publication status: Published in Journal of Economic Issues 47(1): 147-169, 2013.
Cumulative growth; multi-equation system; exports competitiveness; productivity gap; 3SLS regressions;
Other versions of this item:
- Elias Soukiazis & Micaela Antunes, 2013. "Growth Performance in Portugal since the 1960s: A Simultaneous Equation Approach with Cumulative Causation Characteristics," Journal of Economic Issues, M.E. Sharpe, Inc., vol. 47(1), pages 169-192, March.
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-02 (All new papers)
- NEP-CSE-2011-04-02 (Economics of Strategic Management)
- NEP-FDG-2011-04-02 (Financial Development & Growth)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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GEMF Working Papers
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