IDEAS home Printed from https://ideas.repec.org/a/mes/jeciss/v47y2013i1p169-192.html
   My bibliography  Save this article

Growth Performance in Portugal since the 1960s: A Simultaneous Equation Approach with Cumulative Causation Characteristics

Author

Listed:
  • Elias Soukiazis
  • Micaela Antunes

Abstract

The aim of this paper is to explain growth performance in Portugal in the last decades (1965-2006) through a multi-equation system with cumulative growth characteristics. The model uses a demand-orientated approach to determine the main relationships, which explain growth through a virtuous cycle. The idea is to identify the driving forces of growth with causal linkages and feedback tendencies that enable the process to be self-sustained. We estimate the multi-equation growth model by 3SLS to capture more efficiently the interrelations between the main growth forces and to control for the endogeneity of the regressors. Our evidence shows that the proposed model can successfully explain the Portuguese growth performance, highlighting the importance of export competitiveness as the key factor in this process. The cumulative growth process was interrupted at some points mainly due to the incapacity to transfer productivity gains into domestic prices and to make the economy more competitive. We also show that capital accumulation does not affect productivity growth, and domestic prices do not improve export competitiveness. These are the main drawbacks of the Portuguese economy that could explain the failure to achieve higher growth rates in the period 1965-2006.

Suggested Citation

  • Elias Soukiazis & Micaela Antunes, 2013. "Growth Performance in Portugal since the 1960s: A Simultaneous Equation Approach with Cumulative Causation Characteristics," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(1), pages 169-192.
    • Handle: RePEc:mes:jeciss:v:47:y:2013:i:1:p:169-192
    DOI: 10.2753/JEI0021-3624470108
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2753/JEI0021-3624470108
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.2753/JEI0021-3624470108?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bernard Fingleton, 2000. "Convergence: International comparisons based on a simultaneous equation model with regional effects," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(3), pages 285-305.
    2. Kennedy, Charles & Thirlwall, A P, 1972. "Technical Progress: A Survey," Economic Journal, Royal Economic Society, vol. 82(325), pages 11-72, March.
    3. A. P. Thirlwall, 2015. "A Model of Regional Growth Rate Differences on Kaldorian Lines," Palgrave Studies in the History of Economic Thought, in: Essays on Keynesian and Kaldorian Economics, chapter 12, pages 286-301, Palgrave Macmillan.
    4. Lydia Greunz, 2001. "European regional growth, technology gap and R&D efforts," ERSA conference papers ersa01p92, European Regional Science Association.
    5. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    6. Micaela Antunes & Elias Soukiazis, 2009. "How well the balance-of- payments constraint approach explains the Portuguese growth performance: empirical evidence for the 1965-2008 period," GEMF Working Papers 2009-13, GEMF, Faculty of Economics, University of Coimbra.
    7. Bruno Amable, 1993. "Catch-up and convergence : a model of cumulative growth [[Rattrapage et convergence : un modèle de croissance cumulative]]," Post-Print hal-02707053, HAL.
    8. Fulvio Castellacci, 2002. "Technology Gap and Cumulative Growth: Models and outcomes," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 333-346.
    9. A. P. Thirlwall, 2002. "The Nature of Economic Growth," Books, Edward Elgar Publishing, number 2579.
    10. Giorgio Rampa & Luciano Stella & A. P. Thirlwall (ed.), 1998. "Economic Dynamics, Trade and Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-26931-0, December.
    11. Luca Benedictis, 1998. "Cumulative Causation, Harrod’s Trade Multiplier, and Kaldor’s Paradox: The Foundations of Post-Keynesian Theory of Growth Differentials," Palgrave Macmillan Books, in: Giorgio Rampa & Luciano Stella & A. P. Thirlwall (ed.), Economic Dynamics, Trade and Growth, chapter 8, pages 252-280, Palgrave Macmillan.
    12. Nicholas Kaldor, 1975. "What is Wrong with Economic Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 89(3), pages 347-357.
    13. Targetti, Ferdinando & Foti, Alessandro, 1997. "Growth and Productivity: A Model of Cumulative Growth and Catching Up," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(1), pages 27-43, January.
    14. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    15. Robert A. Blecker, 2009. "Long-Run Growth in Open Economies: Export-Led Cumulative Causation or a Balance-of-Payments Constraint?," Working Papers 2009-23, American University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    2. Ana Poças & Elias Soukiazis, 2013. "Explaining the interrelations between health, education and standards of living in Portugal. A simultaneous equation approach," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 9(3), pages 167-187.
    3. Elias Soukiazis & Micaela Antunes & Pedro André Cerqueira, 2017. "Growth adjustments through non-price competitiveness and productivity. A cumulative causation approach," CeBER Working Papers 2017-01, Centre for Business and Economics Research (CeBER), University of Coimbra.
    4. Carlos Figueira, 2017. "Determinants of the Portuguese GDP stagnation during the 2001-2014 period: an empirical investigation," GEE Papers 0068, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Mar 2017.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carton, Christine, 2007. "Un modèle de croissance cumulative étendu á l’éducation: une validation empirique pour la région asiatique [A model of cumulative growth extended to education: an empirical assessment for the Asian," MPRA Paper 20549, University Library of Munich, Germany.
    2. Miguel A. LeÛn-Ledesma, 2002. "Accumulation, innovation and catching-up: an extended cumulative growth model," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(2), pages 201-216, March.
    3. Miguel A. León-Ledesma, 2002. "Cumulative Growth and the Catching-Up Debate From a Disequilibrium Standpoint," Palgrave Macmillan Books, in: John McCombie & Maurizio Pugno & Bruno Soro (ed.), Productivity Growth and Economic Performance, chapter 8, pages 197-218, Palgrave Macmillan.
    4. Stavroula DIMKOU & George MAKRIS, 2017. "Financial Sector And Growth Process In South-Eastern Europe'S Former Socialist Countries: Could A Kaldorian Cumulative Causation Approach Help To Better Understand The Links Between Them?," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 16(1), pages 60-73.
    5. Lavopa, A., 2014. "Catching up and lagging behind in a balance-of-payments-constrained dual economy," MERIT Working Papers 2014-042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Miguel A. LeÛn-Ledesma & A. P. Thirlwall, 2002. "The endogeneity of the natural rate of growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(4), pages 441-459, July.
    7. Christine Carton Madura, 2009. "Mecanismos kaldorianos del crecimiento regional: Aplicación empírica al caso del ALADI (1980-2007)," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 8, pages 1-24, May.
    8. Fulvio Castellacci & Isabel Alvarez, 2006. "Innovation, Diffusion and Cumulative Causation: Changes in the Spanish Growth Regime, 1960-2001," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(2), pages 223-241.
    9. Fulvio Castellacci, 2002. "Technology Gap and Cumulative Growth: Models and outcomes," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 333-346.
    10. Botta, Alberto, 2009. "A structuralist North-South model on structural change, economic growth and catching-up," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 61-73, March.
    11. Ferdinando Targetti, 2005. "Forum 2005," Development and Change, International Institute of Social Studies, vol. 36(6), pages 1185-1199, November.
    12. Young Lee & Jeong Hun Oh & Hwan-Joo Seo, 2002. "Digital Divide and Growth Gap: A Cumulative Relationship," WIDER Working Paper Series DP2002-88, World Institute for Development Economic Research (UNU-WIDER).
    13. Gabriel, Luciano Ferreira & Jayme, Frederico G. & Oreiro, José Luis, 2016. "A North-South Model of Economic Growth, Technological Gap, Structural Change and Real Exchange Rate," Structural Change and Economic Dynamics, Elsevier, vol. 38(C), pages 83-94.
    14. Miguel A. Leon-Ledesma, 1998. "Economic Growth and Verdoorn's Law in the Spanish Regions, 1962-1991," Studies in Economics 9801, School of Economics, University of Kent.
    15. repec:spo:wpmain:info:hdl:2441/46k9rkvut99i7qnn4vqm25t53b is not listed on IDEAS
    16. Elias Soukiazis & Micaela Antunes & Pedro André Cerqueira, 2017. "Growth adjustments through non-price competitiveness and productivity. A cumulative causation approach," CeBER Working Papers 2017-01, Centre for Business and Economics Research (CeBER), University of Coimbra.
    17. Dosi, Giovanni & Roventini, Andrea & Russo, Emanuele, 2019. "Endogenous growth and global divergence in a multi-country agent-based model," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 101-129.
    18. Lydia Greunz, 2001. "European regional growth, technology gap and R&D efforts," ERSA conference papers ersa01p92, European Regional Science Association.
    19. André Nassif & Carmem Feijó & Eliane Araujo, 2016. "What Determined Labour Productivity In The Brazilian Manufacturing Industries In The 2000s?," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 071, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    20. Stefan Ederer & Stefan Schiman, 2018. "Effekte der gesamtwirtschaftlichen Produktion auf die Entwicklung der Produktivität in Österreich und der EU," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 44(1), pages 17-43.
    21. Silva, Ester G. & Teixeira, Aurora A.C., 2008. "Surveying structural change: Seminal contributions and a bibliometric account," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 273-300, December.

    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:jeciss:v:47:y:2013:i:1:p:169-192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MJEI20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.