Allard, C., L. Everaert, with A. Annett, A. Chopra, J. Escolano, D. Hardy, M. Mülheisen, and B. Yontcheva, “Lifting Euro Area Growth: Priorities for Structural Reforms and Governance,” IMF Staff Position Note No. 10/19 (2010).
Almeida, V., G. Castro, and R.M. Félix, 2009, “The Portuguese economy in the European context: structure, shocks and policy,” in The Portuguese Economy in the Context of Economic, Financial and Monetary Integration, Banco de Portugal, 2009.
Amador, J. and C., Coimbra, “Characteristics of the Portuguese Economic Growth: What Has Been Missing?” Banco de Portugal, Working Paper 8, 2007.
Annett, A., “Lessons from Successful Labor Market Reformers in Europe,” IMF Policy Discussion Paper No. 07/1 (Washington: International Monetary Fund).
van Ark, B., M. O’Mahony, and M.P. Timmer, 2008, “The Productivity Gap between Europe and the United States: Trends and Causes,” Journal of Economic Perspectives, Volume 22, Number 1, Winter 2008, pp. 25–44.
Barnes, S., R. Bouis, P. Briard, S. Dougherty, and M. Eris, 2011, “The GDP Impact of Reform: A Simple Simulation Framework,” OECD Economic Department Working Papers No. 834.
Bassanini, A. and R. Duval, 2006, “Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions,” OECD Social, Employment and Migration Working Papers No. 35.
Bassinini, A. and D. Venn, 2008, “The Impact of Labour Market Policies on Productivity in OECD Countries,” International Productivity Monitor, Vol. 17, pp. 3–15.
Bayoumi, T., D. Laxton, and P. Pesenti, 2004, “Benefits and Spillovers of Greater Competition in Europe: A Macroeconomic Assessment,” ECB Working Paper 341.
Berger, H. and S. Danninger, 2007, “The Employment Effects of Labor and Product Market Deregulation and Their Implications for Structural Reform,” IMF Staff Papers, Vol. 54, pp. 591–619.
Bouis, R., O. Causa, R. Bouis, L. Demmou, R. Duval, A. Zdzienicka, 2012, “The Short-Term Effects of Structural Reforms: An Empirical analysis,” OECD Economics Department Working Papers, No. 949.
Bouis, R. and R. Duval, 2011, “Raising Potential Growth After the Crisis: A Quantitative Assessment of the Potential Gains from Various Structural Reforms in the OECD Area and Beyond,” OECD Economic Department Working Papers No. 835.
Cacciatore, M., R. Duval and G. Fiori, 2012, “Short-Term Gain or Pain? A DSGE Model-Based Analysis of the Short-Term Effects of Structural Reforms in Labour and Product Markets,” OECD Economics Department Working Papers, No. 948.
Cincera, M., and O. Galgau, 2005, “Impact of market entry and exit on EU productivity and growth performance,” European Economy, European Commission, Directorate General Economic and Financial Affairs, Economic Papers N. 222, February.
Everaert, L. and W. Schule, 2006, “Structural Reforms in the Euro Area: Economic Impact and Role of Synchronization across Markets and Countries,” IMF Working Paper No. 06/137.
Goldman Sachs, 2012, “Our 2011 GES: A Sharper Signal for Growth,” Goldman Sachs Global Economics, Commodities and Strategy Research.
Gomes, S., P. Jacquinot, M. Mohr, and M. Pisani, 2011, “Structural Reforms and Macroeconomic Performance in the Euro Area Countries, A Model-Based Assessment,” ECB Working Paper No. 1323 (Frankfurt, European Central Bank).
Lemgruber, A. and M. Soto, 2012, “Designing a Growth-Friendly, Equitable, and Sustainable Fiscal Reform in Portugal,” in Portugal: Selected Issues, http://www.imf.org.
Hall, R.E. and C.I. Jones, 1999, “Why Do Some Countries Produce so Much More Output per Worker than Others?” The Quarterly Journal of Economics, February 1999, Vol. 114, Issue 1, pp. 83–116.
Lusinyan, L. and D. Muir, 2012, “Structural Reforms in Italy: Overview and Macroeconomic Impact,” in Italy: Selected Issues, IMF Staff Country Report No. 12/168.
de Long, J.B. and L.H. Summers, 1991, “Equipment Investment and Economic Growth,” The Quarterly Journal of Economics, Vol. 106, Issue 2, pp. 445–502.
Mankiw, N.G., D. Romer, and D.N. Weil, 1992, “A Contribution to the Empirics of Economic Growth,” The Quarterly Journal of Economics, Vol. 107, Issue 2, pp. 407–37.
de Mello, L. and P. C. Padoan, 2010, “Promoting Potential Growth: The Role of Structural Reform,” OECD Economics Department Working Papers, No. 793.
das Neves J.L.C., 1996, “Portuguese Postwar Growth: A Global Approach,” in Economic Growth in Europe Since 1945, N. Crfats and G. Toniolo (ed), Cambridge University Press, 1996.
OECD, 2012, “Medium and Long-term Scenarios for Global Growhth and Imbalances,” OECD Economic Outlook, Volume 2012/1, Chapter 4.
Ostry, J., A. Spilimbergo, and A. Prati, 2009, “Structural Reforms and EconomicPerformance in Advance and Developing Countries,” IMF Occasional Paper (Washington: International Monetary Fund).
Pal, S, F. Coricelli, N. Driffield, and I. Roland, 2012, “When Does Leverage Productivity Growth? A Firm-level Analysis,” Journal of International Money and Finance, 31 (6), pp. 1674–94.
Pérez, E., and Y. Yao, 2012, “Can Institutional Reform Reduce Job Destruction and Unemployment Duration? Yes It Can,” IMF Working Paper No. 12/54.
Stein, J., 2001, “Agency, Information and Corporate Investment,” in Handbook of the Economics of Finance, Edited by G.M. Constantinides, M. Harris and R. Stulz, © 2003 Elsevier Science B.V.
Tang P. and G. Verweij, 2004, “Reducing the Administrative Burden in the European Union,” CPB Memorandum 93, CPB Netherlands Bureau for Economic Policy Analysis.
Prepared by Huidan Lin and Stéphane Roudet. Upaasna Gupta provided excellent research assistance. We are grateful to the staffs from Banco de Portugal, the Ministry of Economy and Employment, and the Ministry of Finance for their helpful comments. The usual disclaimer applies.
This includes a group of 9 EU member countries: Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Sweden, and UK.
Taking into account the relative increase in the number of hours worked in Portugal—which can generate a bias in the TFP calculations if not accounted for—does not fundamentally affect these results.
In particular, the new generation possesses education comparable to other advanced economies. According to the OECD’s Programme for International Student Assessment (PISA) for 2009, the average Portuguese 15-years old student, when rated in terms of reading literacy, mathematics and science knowledge, is placed at the same level as those students from the United States, Sweden, Germany, Ireland, France, Denmark, United Kingdom, Hungary and Taiwan Province of China.
This argument is also often cited as a reason for the difference in productivity growth between the U.S. and Europe during this period (Van Ark et al., 2008).
This reflects for instance higher funding costs stemming for asymmetric information between firm managers and lenders, as well as fear of bankruptcy when leverage is high and investment opportunities riskier. Stein (2001) provides a comprehensive review of the modern finance literature on this topic.