Improving Competition in the Non-Tradable Goods and Labour Markets: The Portuguese

Bank of Portugal Working Papers Series no. 16/2008

53 Pages Posted: 10 Mar 2010

See all articles by Ricardo Mourinho Felix

Ricardo Mourinho Felix

Banco de Portugal

Gabriela Castro

affiliation not provided to SSRN

Vanda Almeida

European Commission - Joint Research Centre

Date Written: October 2008

Abstract

This study assesses the macroeconomic impacts of increasing competition in the non-tradable goods and labour markets in Portugal. We lean on evidence that the maintenance of low competition in these markets may have contributed to the recent poor performance of the Portuguese economy. The analysis is performed using PESSOA, a dynamic general equilibrium model for a small-open economy integrated in a monetary union, featuring Blanchard-Yaari households, a multi-sectoral production structure and a number of nominal and real rigidities. We conclude that measures aimed at increasing competition in the Portuguese non-tradable goods and labour markets could induce important international competitiveness gains and be valuable instruments in promoting necessary adjustments within the monetary union frame-work. However, in the short run, real interest rates are likely to increase temporarily, driving consumption and output temporarily downwards.

Keywords: competition, competitiveness, DSGE, small-open economy, Portugal

JEL Classification: E2, E60, F16, F41

Suggested Citation

Felix, Ricardo Mourinho and Castro, Gabriela and Almeida, Vanda, Improving Competition in the Non-Tradable Goods and Labour Markets: The Portuguese (October 2008). Bank of Portugal Working Papers Series no. 16/2008, Available at SSRN: https://ssrn.com/abstract=1535278 or http://dx.doi.org/10.2139/ssrn.1535278

Ricardo Mourinho Felix (Contact Author)

Banco de Portugal ( email )

R. do Ouro, 27
Lisboa, 1100-150
Portugal
+351213130321 (Phone)

Gabriela Castro

affiliation not provided to SSRN ( email )

Vanda Almeida

European Commission - Joint Research Centre ( email )

Edificio Expo
Calle Inca Garcilaso, 3
Sevilla, Sevilla 41092
Spain

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
30
Abstract Views
847
PlumX Metrics