Improving competition in the non-tradable goods and labour markets: the Portuguese case

Ricardo Mourinho Félix (), Vanda Almeida () and Gabriela Lopes de Castro ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study assesses the macroeconomic impacts of increasing competition in the non-tradable goods and labour markets in Portugal. We lean on evidence that the maintenance of low competition in these markets may have contributed to the recent poor performance of the Portuguese economy. The analysis is performed using PESSOA, a dynamic general equilibrium model for a small-open economy integrated in a monetary union, featuring Blanchard-Yaari households, a multi-sectoral production structure and a number of nominal and real rigidities. We conclude that measures aimed at increasing competition in the Portuguese non-tradable goods and labour markets could induce important international competitiveness gains and be valuable instruments in promoting necessary adjustments within the monetary union framework. However, in the short run, real interest rates are likely to increase temporarily, driving consumption and output temporarily downwards.

Keywords: competition; competitiveness; DSGE; small-open economy; Portugal (search for similar items in EconPapers)
JEL-codes: F16 E2 E6 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cse and nep-dge
Date: 2008-09-25
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Related works:
Journal Article: Improving competition in the non-tradable goods and labour markets: the Portuguese case (2010)
Working Paper: Improving Competition in the Non-Tradable Goods and Labour Markets: The Portuguese Case (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:13945

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