Specialization and economic growth: some aspects concerning the Portuguese case in 1960 to 1974

Abstract

During the 1960-74 period the degree of apenness of the Portuguese economy increased substantially. The rise in exports and the growth of the domestic market were the main demand factors contributing to the growth of gross output. Import-substitution was positive up to the mid-late 60's and negative thereafter. Economic growth could have been faster before hitting the foreign exchange constraint because the balance of payments was regularly in surplus throughout the period. The Portuguese currency was «overvalued» (in terms of the «equilibrium» exchange rate for goods and services) due to the magnitude of the emigrant remmittances. Such a situation is likely to have contributed to the debility of the productive apparatus as it favoured imports and restricted export prospects.