Macroeconomics

"The emergency of economic growth theory in the late eighties has been raising some important questions regarding the link between mainstream analysis and heterodoxy perspective. Some radical papers have been claiming that this new approach is essentially based on radical ideas and thus it does not constitute a “new economic perspective”. On the other hand, several other articles have been arguing that endogenous growth theory represents a challenge to radical economics in a sense that it incorporates and models some of the main radical concepts trough a completely new perspective. Our aim is to understand the relationship between these two research lines, based on a comparison of concepts and methods. The existence of a set of common concepts and a different method of analysis are some of the main findings."

Unemployment is one of the most important subjects in macroeconomics. Its constant presence in almost any economy raises a question that many economists and researchers have tried to answer: why is there unemployment? One of the simplest answers relies on the existence of a minimum wage above market-clearing wage. However, what can be the explanation in the absence of a minimum wage or when this is fixed below market-clearing wage? Alfred Marshall proposed one of the most important ideas to answer these questions: the efficiency wage hypothesis. Alfred Marshall argued that firms could actually want to pay more than market-clearing wage in order to increase the workers productivity or efficiency. In this paper we focus our analyses on the Shapiro-Stiglitz model. In this case, since firms cannot monitor their workers’ effort perfectly, they have an incentive to pay more than market-clearing wage to induce workers not to shirk. In the first section we introduce, derive and analyze the model in economical terms; in the next section we implement and solve the model for several parameters in matlab; after that we make some simulations and interpret the results in economical terms; in the fourth section we present a welfare analysis; finally we state the main criticism and the key results.

Unemployment is one of the most intriguing phenomena in Economics, especially in macroeconomics. Presently, since several countries, in particularly, Greece, Portugal and Spain are in some kind of recession, one of the most important priorities is to understand the behavior of unemployment. In fact, this (severe) recession is one of the explanations for the constant increasing of Portuguese unemployment in the past few years – it already crossed the 14% level in 2011, an historical maximum. In order to try to explain the unemployment behavior, in this paper we introduce the well-known Search and Matching Model. Basically, this model assumes that, in fact, workers and jobs are not identical – in other words, workers and jobs are highly heterogeneous. This implies that two main aspects: first of all, we are not in the typical neoclassical labor market, where workers are homogeneous and firm are completely indifferent about losing their workers, since identical workers are costlessly available at the same wage; and therefore this leads to the second point: in a search for a worker/firm, workers and firms meet in a decentralized labor market and engage in a costly process of trying to match up skills, needs and preferences. Moreover, we also introduce two extensions in the model: an unemployed receives a constant income; and there is a Nash bargaining wage-setting between workers and firms. In the first section we introduce, derive and analyze the model in economical terms; in the next section we implement and solve the model for several parameters in matlab; after that we make some simulations and interpret the results in economical terms; in the fourth section we state the main criticisms and analyze several Portuguese empirical data; and finally we state the sum up the main conclusions.

The Solow-Swan Model is the baseline of the Neoclassical Economic Growth Models. With simple but powerful assumptions the Solow-Swan model results are clear and consistent. Therefore this model is the common starting point for studying Economic Growth. In this paper we introduce two extensions of the model: Human Capital and Government. In the first section we explain the main assumptions and derive the differential equations. In the next section we implement the model in a computational software – Matlab – and solve the model for several parameters. Then (section three) we make some simulations, interpret the results and conclude the model (section four).

This paper is part of the wwwforeurope project, an international research project that aims to identify the best strategies to overcome the financial crisis and to guarantee “Welfare, Wealth and Work for Europe in the long-run”. Taking into account recent developments, special focus will be put on the “peripheral countries” (Greece, Ireland, Portugal and Spain). Therefore, as part of this project, throughout this article we describe and analyze the current Portuguese situation focusing on empirical evidence and data (EUROSTAT, AMECO, INE, etc.). Thus, one should expect a simple and practical analysis without any theoretical models. Competitiveness, industrial policy, structural problems and current and long term measures to guarantee a sustainable recovery are the main topics. In general, we find that Portugal has a strong industrial sector, specialized in low-tech industries; a serious structural problem regarding education and it has also shown substantial improvements in areas like innovation and R&D.

A fixação do salário mínimo tem sido uma das questões mais debatidas na actualidade, constituindo uma preocupação constante da autoridade reguladora. Apesar do seu objectivo principal ser a garantia de  um nível de vida digno a todos os trabalhadores, o salário mínimo é frequentemente criticado pelas distorções que provoca no funcionamento do mercado de trabalho e pelo aumento do desemprego que tende a gerar, de acordo com a corrente económica dominante. Porém, a teoria económica evidencia que, em determinadas estruturas de mercado, por exemplo, no oligopsónio, uma fixação bem planeada do salário mínimo pode gerar um efeito positivo no emprego e no bem-estar. Para testar esta teoria no caso português, foram estimados vários modelos usando series temporais, de periodicidade anual, compreendendo o período de 1999 a 2008, que permitiram concluir por elasticidades positivas significativas entre o salário mínimo e o emprego de jovens e de pessoas com baixa formação. Para além disso, foi efectuada uma análise empírica com dados seccionais sobre as diferentes economias europeias, que também sugeriu um impacto positivo do salário mínimo no emprego. A inclusão de outras variáveis explicativas na especificação dos modelos permitiu demonstrar, contudo, que as diferenças dos níveis de emprego observados em cada país podem ser melhor explicadas por outros factores relacionados com a rigidez do mercado de trabalho.

School Choice Theory is one of the research areas in Economics that has an immediate application to reality: every
year, thousands of students around the world have to enroll at a new school. This paper introduces the Portuguese
School Matching Algorithm and analyzes its main properties. I show that (a) the Portuguese algorithm can be
described almost as the deferred-acceptance (DA) algorithm; (b) the constraint in terms of the number of schools
parents can submit might harm the strategy-proof characteristic of the DA algorithm; (c) there are still several ways
students can manipulate the system of priorities. Finally, I propose a new approach regarding the strategy-proof
property by distinguishing between static-strategy-proof and dynamic-strategy-proof.

Este trabalho introduz a temática de Crescimento Económico, os seus principais indicadores e alguns modelos base necessários à compreensão do fenómeno.
O capítulo I esboça uma introdução genérica, cobrindo temas como o Rendimento per capita, a taxa de câmbio, paridade de poderes de compra, entre outros. Discute-se também as diferenças entre Crescimento Económico e Desenvolvimento Económico.
O capítulo II expõe os primeiros modelos de crescimento económico, a saber: o Modelo de Harrod, o Modelo de Solow (sem progresso técnico) e o Modelo de Kaldor. São derivadas as principais equações e apresentados os gráficos chave em cada modelo.
O capítulo III retrata o modelo de Solow com progresso técnico e utiliza-se a função produção Cobb-Douglas a título de exemplo.
O capítulo seguinte está dividido em três partes. A primeira diz respeito à contabilidade do crescimento; a segunda aos factos estilizados de Kaldor; e a terceira confronta o modelo de Solow com progresso técnico com estes mesmos factos estilizados.
O capítulo V debate a problemática da convergência. Distinguem-se conceitos como convergência absoluta de condicionada e analisam-se os resultados à luz do modelo de Solow.
Finalmente, o capítulo VI apresenta os primeiros modelos de crescimento endógeno. Primeiro é feita uma nota introdutória sobre a natureza do conhecimento. Depois são explicados e demonstrados quatro modelos: (a) modelo AK, (b) o primeiro modelo de Romer; (c) o modelo de Lucas; e (d) o segundo modelo de Romer.