Case Study: DBRS Sovereign Rating of Portugal. Analysis of Rating Methodology and Rating Decisions

This paper examines the DBRS sovereign credit rating methodology and its rating decisions on Portugal. The paper identifies country-specific risk factors and technical specifications that justify the agency’s issuance of Portugal’s investment-grade notation throughout the sovereign debt crisis – which preserved Portugal’s access to the ECB bond purchase program. Both qualitative and empirical findings show… Continue reading Case Study: DBRS Sovereign Rating of Portugal. Analysis of Rating Methodology and Rating Decisions

Drug decriminalization and the price of illicit drugs

One moderate alternative to the war on drugs is to follow Portugal’s lead and decriminalize all drug use while maintaining the illegality of drug trafficking. — Gary S. Becker and Kevin M. Murphy (2013) In the late 1980s and 1990s a growing population of intravenous heroin users became a major threat to public health in Portugal,… Continue reading Drug decriminalization and the price of illicit drugs

Portugal: A Paradox in Productivity

Portugal is less productive than advanced economies. Paradoxically, the recent improvement in areas such as human capital, investment in innovation and R&D or a more friendly business environment has yet to lead to convergence in productivity levels. The Portuguese labour productivity as a percentage of G7 countries peaked in 1993 at 63.4%, decreasing since then… Continue reading Portugal: A Paradox in Productivity

Spillovers of investment in PPPs onto Portuguese Public and Private investment and GDP

This paper presents results of time series techniques assessing the macroeconomic impact of investment in public-private partnerships (PPPs) on public and private investment in Portugal, using data for the period 1998-2013. The approach used allows the computation of crowding-in/crowding-out effects of investment from PPPs, that is, whether investment in PPPs provides favorable spillovers for the… Continue reading Spillovers of investment in PPPs onto Portuguese Public and Private investment and GDP

Entry and exit in the 2008–2013 Portuguese economic crisis

Recessions are conventionally considered as times in which low-productivity firms are driven out of the market at a relatively accelerated pace and resources freed to more productive uses as a result. But recessions that are closely associated with financial crises can reduce efficiency in resource reallocation through reduced bank lending to profitable projects. Banks may… Continue reading Entry and exit in the 2008–2013 Portuguese economic crisis

Upward Nominal Wage Rigidity: Extensions to Wage Agreements

In Portugal, as in many other countries in continental Europe, the collective wage agreements between trade unions and employer associations are systematically extended to non-subscriber workers and employers. Since these agreements establish wage floors for most job titles, their frequent extension is equivalent to setting a wide range of compulsory minimum wages, which are regularly… Continue reading Upward Nominal Wage Rigidity: Extensions to Wage Agreements

Boom, Slump, Sudden stops, Recovery, and Policy Options. Portugal and the Euro

Over the past 20 years, Portugal has gone through a boom, a slump, a sudden stop, and now a timid recovery. Unemployment has decreased, but remains high, and output is still far below potential. Competitiveness has improved, but more is needed to keep the current account in check as the economy recovers. Private and public… Continue reading Boom, Slump, Sudden stops, Recovery, and Policy Options. Portugal and the Euro