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What the keynesian theory said about Portugal?

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  • Martinho, Vítor João Pereira Domingues

Abstract

This work aims to test the Verdoorn Law, with the alternative specifications of (1)Kaldor (1966), for the 28 NUTS III Portuguese in the period 1995 to 1999. It is intended to test, also in this work, the alternative interpretation of (2)Rowthorn (1975) about the Verdoorn's Law for the same regions and periods. With this study we want, also, to test the Verdoorn´s Law at a regional and a sectoral levels (NUTs II) for the period 1995-1999. The importance of some additional variables in the original specification of Verdoorn´s Law is also tested, such as, trade flows, capital accumulation and labour concentration. The main objective is to confirm the presence of economies to scale that characterise the polarisation process with cumulative causation properties, explaining regional divergence. By introducing new variables to the original specification of Verdoorn´s Law we intend to examine how the economies to scale are influenced by the consideration of factors related to the Polarisation (Keynensian tradition) and Agglomeration (spatial economics tradition) phenomena. This study analyses, yet, through cross-section estimation methods, the influence of spatial effects in productivity in the NUTs III economic sectors of mainland Portugal from 1995 to 1999, considering the Verdoorn relationship.

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  • Martinho, Vítor João Pereira Domingues, 2011. "What the keynesian theory said about Portugal?," MPRA Paper 32610, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32610
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    1. Reinhold Kosfeld & Christian Dreger, 2006. "Thresholds for employment and unemployment: A spatial analysis of German regional labour markets, 1992–2000," Papers in Regional Science, Wiley Blackwell, vol. 85(4), pages 523-542, November.
    2. Giorgio Fazio & Enza Maltese & Davide Piacentino, 2013. "Estimating Verdoorn law for Italian firms and regions," Letters in Spatial and Resource Sciences, Springer, vol. 6(1), pages 45-54, March.
    3. Vitor Joao Pereira Domingues Martinho, 2011. "The Verdoorn Law in the Portuguese Regions: A Panel Data Analysis," Papers 1110.5544, arXiv.org.
    4. Fingleton, B., 1999. "Economic Geography with Spatial Econometrics: a 'Third Way' to Analyse Economic Development and 'Equilibrium', with Application to the EU Regions," Economics Working Papers eco99/21, European University Institute.
    5. Vitor Joao Pereira Domingues Martinho, 2011. "An Alternative Use of the Verdoorn Law at the Portuguese NUTs II Level," Papers 1110.5548, arXiv.org.
    6. Fingleton, B & McCombie, J S L, 1998. "Increasing Returns and Economic Growth: Some Evidence for Manufacturing from the European Union Regions," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 89-105, January.
    7. Rowthorn, R E, 1979. "A Note on Verdoorn's Law," Economic Journal, Royal Economic Society, vol. 89(353), pages 131-133, March.
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    10. Ingrid H. Rima, 2010. "The Political Economy of the Undervalued Renminbi," DETU Working Papers 1012, Department of Economics, Temple University.
    11. Nicholas Apergis & Spyros Zikos, 2003. "The Law of Verdoorn: Evidence from Greek Disaggregated Manufacturing Time Series Data," The Economic and Social Review, Economic and Social Studies, vol. 34(1), pages 87-104.
    12. Romina Gambacorta, 2004. "Il dibattito sulla legge di Verdoorn: alcuni risultati empirici usando l’analisi di cointegrazione," Rivista di Politica Economica, SIPI Spa, vol. 94(3), pages 251-251, May-June.
    13. Elias Soukiazis & Vitor Martinho, 2005. "Economias à Escala e Endogeneidade dos Factores Produtivos. Análise regional e sectorial ao nível das NUTs II portuguesas," Notas Económicas, Faculty of Economics, University of Coimbra, issue 22, pages 23-50, December.
    14. Ferdinando Ofria, 2009. "L'approccio Kaldor-Verdoorn: una verifica empirica per il Centro-Nord e il Mezzogiorno d'Italia (anni 1951-2006)," Rivista di Politica Economica, SIPI Spa, issue 1, pages 179-207, January-M.
    15. Vitor Joao Pereira Domingues Martinho, 2011. "Spatial Effects and Verdoorn Law in the Portuguese Context," Papers 1110.5573, arXiv.org.
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    Cited by:

    1. Martinho, Vítor João Pereira Domingues, 2011. "What said the economic theory about Portugal. Another approach," MPRA Paper 33022, University Library of Munich, Germany.
    2. Martinho, Vítor João Pereira Domingues, 2011. "Application of keynesian theory and new economic geography in Portugal. Differences and similarities," MPRA Paper 32911, University Library of Munich, Germany.

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    More about this item

    Keywords

    Verdoorn law; spatial autocorrelation; Portuguese regions;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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