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Application of Keynesian and convergence theories in Portugal. Differences and similarities

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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, yet, 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. 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. The aim of this paper is, also, to present a further contribution, with panel data, to the analysis of absolute convergence, associated with the neoclassical theory, and conditional, associated with endogenous growth theory, of the sectoral productivity at regional level (from 1995 to 1999). The structural variables used in the analysis of conditional convergence is the ratio of capital/output, the flow of goods/output and location ratio.

Suggested Citation

  • Martinho, Vítor João Pereira Domingues, 2011. "Application of Keynesian and convergence theories in Portugal. Differences and similarities," MPRA Paper 32910, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32910
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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Vitor Joao Pereira Domingues Martinho, 2011. "Spatial Effects and Convergence Theory in the Portuguese Situation," Papers 1110.5571, arXiv.org.
    3. Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003. "Specification searches in spatial econometrics: the relevance of Hendry's methodology," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 557-579, September.
    4. Vitor Joao Pereira Domingues Martinho, 2011. "Sectoral Convergence in Output Per Worker Between Portuguese Regions," Papers 1110.5552, arXiv.org.
    5. Vitor Joao Pereira Domingues Martinho, 2011. "The Verdoorn Law in the Portuguese Regions: A Panel Data Analysis," Papers 1110.5544, arXiv.org.
    6. Martinho, Vítor João Pereira Domingues, 2011. "What said the neoclassical and endogenous growth theories about Portugal?," MPRA Paper 32631, University Library of Munich, Germany.
    7. Vitor Joao Pereira Domingues Martinho, 2011. "Spatial Effects in Convergence of Portuguese Product," Papers 1110.5556, arXiv.org.
    8. Vítor João Pereira Domingues Martinho, 2011. "Spatial Autocorrelation and Verdoorn Law in Portugal," Working Papers 11/2011, University of Verona, Department of Economics.
    9. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    10. Vitor Joao Pereira Domingues Martinho, 2011. "An Alternative Use of the Verdoorn Law at the Portuguese NUTs II Level," Papers 1110.5548, arXiv.org.
    11. Vitor João Pereira Martinho, 2004. "Endogenous productivity and scale economies. a verdoorn law application in the Portuguese regions," ERSA conference papers ersa04p9, European Regional Science Association.
    12. 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.
    13. Vitor Joao Pereira Domingues Martinho, 2011. "Spatial Effects and Verdoorn Law in the Portuguese Context," Papers 1110.5573, arXiv.org.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Verdoorn law; convergence; 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
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • 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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