Portuguese Economic Journal

, Volume 6, Issue 1, pp 1–21 | Cite as

Adjustment within the euro. The difficult case of Portugal

  • Olivier BlanchardEmail author
Open Access
Original Article


In the second half of the 1990s, the prospect of entry in the euro led to an output boom and large current account deficits in Portugal. Since then, the boom has turned into a slump. Current account deficits are still large, and so are budget deficits. This paper reviews the facts, the likely adjustment in the absence of major policy changes, and examines policy options.

JEL Classification

E32 E65 F32 F41 J50 


Common currency Euro Appreciation Depreciation Competitiveness Current account deficit Expansion Recession Portugal Productivity growth 


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Copyright information

© Springer-Verlag 2006

Authors and Affiliations

  1. 1.Department of EconomicsMITCambridgeUSA

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