Portugal Before and After the European Union: Facts on Nontradables

Fernando Alexandre and Pedro Bação
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Fernando Alexandre: University of Minho and NIPE, Portugal

No 2013-02, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: The rise of nontradable sectors has been mentioned as one of the causes of low economic growth and external imbalances in the Portuguese economy. In this paper we describe the main trends and jumps in the evolution of nontradable sectors, since the mid-1950s, using four different databases to shed light on different dimensions of this issue. We show that, despite the pattern of the growth of the share of services being similar to that observed in other developed countries, since the early 1990s it has been significantly larger than in most countries. We find that the shift to nontradables in Portugal has been fast and that it occurred essentially at the expense of agriculture in the period 1953-95, and essentially at the expense of industry in the period 1995-2009. In 2009, the share of nontradables (defined as the sum of services plus construction) in total GVA reached 68%, if we exclude open service sectors, and 81.1%, if we treat all service sectors as nontradable. We also find that more than half of the change towards nontradables since joining the European Union took place in the period 1988-1993. Finally, we show that construction and services facing a strong Government demand were the main drivers of the increasing weight of nontradables in the Portuguese economy since 1986.

Keywords: nontradable sectors; Portugal; Services; Structural Change. (search for similar items in EconPapers)
JEL-codes: N60 N70 O14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-01
New Economics Papers: this item is included in nep-his and nep-hme
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Related works:
Working Paper: Portugal before and after the European Union: Facts on Nontradables (2012)
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