Author: Philip Lane

here.

papers here.   Includes:

Portuguese Economic Slump Caused by the Large Capital Inflows that Came with the Euro
Clues as to What is Happening Europe-wide; Outlook for the Future is Grim
by Ricardo Reis

Over the past 12 years, Portugal has been in a severe economic slump—growing less than the US during the Great Depression and Japan during the Lost Decade—and that slump was mainly caused by the country’s inability to efficiently allocate the foreign capital inflows it received after joining the Eurozone in 1999, according to “The Portuguese Slump and Crash and the Euro-Crisis.” Because Portugal was one of the first countries where the symptoms of the sovereign debt crisis were initially identified, it can help macroeconomists understand what has been happening in Europe more broadly. Portugal did not have a housing boom like Spain and Ireland, nor as rampant an increase in public debt as Greece, nor does it have Italian political instability: yet, since 2010, all five countries have been in a similar crisis.

Reuters article here.

Mody article here.

The new release is here.

• 2012 nominal GDP and GNP ahead of projections used in December’s budget  (163,595/133,403 versus 163,150/130,850)
• 2012 real growth rates were 0.9% for GDP and a remarkable 3.4% for GNP
• Caveat –  GNP is not straightforward to interpret.  A quirk of national accounting is that the overseas profits of a firm that is headquartered in Ireland are included even if all of the shareholders are foreign. In relation to portfolio shareholders (ie holding less than 10 percent stake), GNP is then reduced when dividend payments are made to shareholders.  So,  GNP can be temporarily boosted if such a firm chooses to retain earnings rather than pass along earnings to shareholders through dividend payments.  This may be empirically relevant for Ireland in view of the pattern of some global firms opting to establish headquarters in Ireland.

alternative plan here.