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Measuring the Carnation Revolution: A Synthetic Control Analysis of Economic Crisis in Portugal (1974-1992)
Orientador(es)
Resumo(s)
On 25 April 1974, a military coup toppled Western Europe’s oldest dictatorship, Portugal’s Estado
Novo. The following years were characterized by political and economic instability with a wage
explosion and the reduction of working hours for the country’s labor force, the expropriation of the
assets of the business elite and a process of capital flight, and the end of colonial trade and the arrival
of about half a million repatriates with the end of the empire. As a result of these events the
Portuguese economy slowed from its 1950s and ‘60s high growth and industrialization, when it had
been counted among the fastest growing in the world. But measuring the impact of the “Carnation
Revolution” is very difficult due to its coincidence with the 1970s oil shocks. What part of responsibility
for the poor performance should be attributed to the international crisis and what part to the
consequences associated with the revolution? To disentangle the problem, we use the synthetic
control method with data for other OECD countries. We find that the Carnation Revolution and the
subsequent events caused a negative structural break that made GDP per capita lower than it would
have been in the absence of the revolution and the instability. We also analyze the effects on the
current account and capital-labor ratios.
Descrição
Palavras-chave
Economic Growth Crisis 1970s Carnation Revolution Portugal
Contexto Educativo
Citação
Amaral, Luciano,Marques, Bruno Lopes, Pereira dos Santos, João . Measuring the carnation revolution: A synthetic control analysis of economic crisis in Portugal (1974-1992). (May 2022) Nova SBE Working Paper Series No. 641
Editora
Nova School of Business and Economics