What has been driving the fluctuations in the portuguese economy? A business-cycle accounting approach

Mestrado em EconomiaA comunidade cientifica tem examinado a economia portuguesa na procura por uma possível justificação para a década perdida e, mais recentemente, a crise da dívida soberana. Nesta dissertação dedico-me a medir e avaliar as flutuações da economia portugesa através de um método chamado Business cycle Accounting. Na aplicação deste método foco-me em três períodos chave, que resultam da subdivisão do período entre 1992 e hoje. Após obter o resultado que a Investment wedge foi a distorção que melhor explica as flutuações da economia portuguesa entre 1992 e 2001, e entre 2007 e 2014 e a efficiency wedge a que melhor explica esta evolução para o período entre 2001 e 2007, dedico me a procurar na literatura explicações plausíveis para este resultado. Em conclusão, estes resultados obtidos discordam com literatura passada na aplicação deste método à economia portuguesa.The Portuguese economy has been submitted to a thorough evaluation by the scientific community, in a search to explain the Portuguese ?lost decade? and, more recently, the sovereign-debt crisis following the Great Recession. In this dissertation I measure and evaluate the fluctuations in the Portuguese economy using the Business-Cycle Accounting (BCA) method. I especially focus on three economic crises that hit the Portuguese economy from 1992 to the present day. I also provide some context on the shape of the Portuguese economy, mainly by checking what were the biggest obstacles to growth according to the literature. Applying the BCA procedure to the Portuguese economy led to the conclusion that the investment wedge had the largest role in explaining the fluctuations of the economy as a whole for both the 1992-2001 and 2007-2014 periods and that the efficiency wedge played a major role in the 2001-2007 slump. According to Portugal and Blanchard (2017) there is a cycle throughout 1992-2013. The period studied on this dissertation will focus on this cycle and its boom, slump and recession sub-periods. The conclusions obtained are somewhat different from those in the previous BCA literature on the Portuguese economy. Namely, the efficiency wedge is the main explainer in both Iskrev (2013) and Cavalcanti (2007), although providing a similar result to the period in study they disregard the importance of the investment wedge.