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The Fundamentals of the Portuguese Crisis

Author

Listed:
  • João Sousa Andrade

    () (GEMF and Faculty of Economics, University of Coimbra, Portugal)

  • Adelaide Duarte

    () (GEMF and Faculty of Economics, University of Coimbra, Portugal)

Abstract

This paper analyses the fundamentals of the Portuguese crisis. The financial crisis of 2007 worsened and triggered the current Portuguese crisis. We argue that the main problem the economy is facing is its output stagnation due to a kind of Dutch disease that has created high and increasing levels of indebtedness, low and decreasing levels of saving and has reduced Portuguese competitiveness. Moreover, the existence of a dualist labour market and a new wave of emigration produce inefficiency, increasing unemployment of younger workers and the supply of human capital abroad funded by the Portuguese taxpayers. Governance problems such as poor public budget governance and lack of transparency and accountability are also at stake. These governance problems must be solved to allow the economy to return to its long-run growth path.ntion paid to it than hitherto.

Suggested Citation

  • João Sousa Andrade & Adelaide Duarte, 2011. "The Fundamentals of the Portuguese Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 195-218, June.
  • Handle: RePEc:voj:journl:v:58:y:2011:i:2:p:195-218
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jean Pisani-Ferry & André Sapir & Guntram B. Wolff, . "EU-IMF assistance to euro area countries: an early assessment," Blueprints, Bruegel, number 779, November.
    2. Pedro Bação & João Maia Domingues & António Portugal Duarte, 2012. "Financial Crisis and Domino Effect," Book Chapters, Institute of Economic Sciences.
    3. Jovan Filipović & Srečko Devjak & Goran Putnik, 2012. "Knowledge Based Economy: The Role of Expert Diaspora," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 369-386.
    4. Fernando A. de Oliveira Tavares & Elisabeth T. Pereira & António Carrizo Moreira, 2014. "The Portuguese Residential Real Estate Market. An Evaluation of the Last Decade Abstract: This article presents an integrated vision of the context of the residential real estate market in Portugal. I," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 739-757.
    5. Pedro Bação & António Portugal Durate & Mariana Simões, 2013. "The International Monetary System in Flux: Overview and Prospects," GEMF Working Papers 2013-07, GEMF, Faculty of Economics, University of Coimbra.
    6. Nikolina E. Kosteletou, 2013. "Financial Integration, Euro and the Twin Deficits of Southern Eurozone Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 161-178.
    7. Francisco Carballo-Cruz, 2011. "Causes and Consequences of the Spanish Economic Crisis: Why the Recovery is Taken so Long?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 309-328.
    8. Trabelsi, Mohamed Ali, 2012. "The Impact of The Sovereign Debt Crisis on The Eurozone Countries," MPRA Paper 76974, University Library of Munich, Germany, revised 2012.
    9. Matej Marinč & Mojmir Mrak & Vasja Rant, 2014. "Dimensions of Bank Capital Regulation: A Cross-Country Analysis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 415-439.

    More about this item

    Keywords

    Growth; Debt; Saving; Dutch disease; Unemployment; Budget policy;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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