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Portugal in the Eurozone: Evolution and Expectations

Author

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  • Pedro Miguel Avelino Bação

    (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra)

  • Sara Cerdeira

    (Statistics Portugal)

  • António Manuel Portugal Duarte

    (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra)

Abstract

At the time of joining the European Economic Community (precursor to the European Union) and the Eurozone, Portuguese agents were very optimistic about the level of development that the country would be able to achieve as a result of being a member of those economic areas. In this paper we describe the changes occurred in the Portuguese economy since joining the European Union and later the Eurozone. In addition, we provide estimates of the evolution of the expectations of Portuguese agents with respect to long-term real per capita GDP, based on a simple intertemporal macroeconomic model. Over the period under analysis, there was an impressive progress in standards of living. Before joining the euro, Portuguese agents were optimistic about long-term income. Expectations remained high until the onset of the debt crisis, at which time expectations collapsed. A slow recovery is visible in our estimates for the most recent years.

Suggested Citation

  • Pedro Miguel Avelino Bação & Sara Cerdeira & António Manuel Portugal Duarte, 2019. "Portugal in the Eurozone: Evolution and Expectations," CeBER Working Papers 2019-07, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2019-07
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    More about this item

    Keywords

    Development; Euro; European Union; Macroeconomic expectations; Portugal.;
    All these keywords.

    JEL classification:

    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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