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Output in the Portuguese post-2008 period: A general equilibrium narrative

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  • José R. Maria
  • Paulo Júlio

Abstract

We use Bayesian methods to estimate a simplified version of PESSOA, a medium scale small-open Dynamic Stochastic General Equilibrium model featuring key characteristics of an economy integrated in a monetary union. Financial factors emerge as the most important driving force of business cycle fluctuations since the Euro Area inception. The 2008--2009 recession was primarily driven by external and tecnhological factors, whereas the 2011--2013 downturn was triggered by fiscal and financial developments, and latter amplified by technology shocks.

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  • José R. Maria & Paulo Júlio, . "Output in the Portuguese post-2008 period: A general equilibrium narrative," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:bdpart:r201707
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