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Distinguishing between potential sources of growth convergence for the Portuguese economy within the EU. A panel data - time series study of the aggregate production function

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Listed:
  • Marta Cristina Nunes Simões

    (Faculty of Economic, University of Coimbra)

  • Maria Adelaide Silva Duarte

    (Faculty of Economic, University of Coimbra)

Abstract

What are the potential sources of growth and how is the convergence process of the Portuguese economy within the EU characterised? We answer this question by determining the most suitable specification of the aggregate production function, CES or Cobb-Douglas, for the EU countries as in Duffy&Papageorgiou (2000). If the aggregate production technology is best described by a CES production function then the potential sources of growth are wider than the ones associated with a Cobb-Douglas technology. For instance, with an elasticity of substitution between inputs greater than one (ó>1) it is possible to have endogenous growth (see Jones&Manuelli (1990), Rebelo (1991)) while for ó 1, it is possible to have endogenous growth although the characterisation of our series does not allow us to ignore the spurious regression problem.

Suggested Citation

  • Marta Cristina Nunes Simões & Maria Adelaide Silva Duarte, 2003. "Distinguishing between potential sources of growth convergence for the Portuguese economy within the EU. A panel data - time series study of the aggregate production function," Economics Working Papers 7_2003, University of Évora, Department of Economics (Portugal).
    • Handle: RePEc:evo:wpecon:7_2003
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    File URL: http://hdl.handle.net/10174/8402
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    References listed on IDEAS

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