The Fundamentals of the Portuguese Crisis

João Andrade and Maria Adelaide Duarte

No 2011-16, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

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 that 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 vague of emigration reproduces inefficiency increasing unemployment of younger workers and the supply of human capital abroad funded by the Portuguese taxpayers. Governance problems such as bad public budget governance, lack of transparency and accountability are also at stake and have to be solved to allow the economy to return to its long-run growth path.

Keywords: Growth; Debt; Saving; Dutch disease; Unemployment; Budget policy. (search for similar items in EconPapers)
JEL-codes: E21 F34 G01 H10 H63 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-09
New Economics Papers: this item is included in nep-eec, nep-iue and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published in Panoeconomicus 58(2): 195-218, 2011.

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Persistent link: https://EconPapers.repec.org/RePEc:gmf:wpaper:2011-16

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