How the gold standard functioned in Portugal: an analysis of some macroeconomic aspects

This paper studies the Gold Standard in Portugal. It was the first country in Europe to join Great Britain in 1854. The principle of free gold convertibility was abandoned in 1891. For the purposes of a macroeconomic study, we also extended the analysis up to 1913. Our study points out the mistake of comparing different systems with the same indicators. Examination of demand, supply and monetary shocks in the context of a VAR model confirm the idea that the principles of classical economics are appropriate for the Gold Standard in Portugal.Gold Standard, Macroeconomic Stability, Convertibility, Portugal, VAR and Unit Roots

How the Gold Standard Functioned in Portugal: An Analysis of Some Macroeconomic Aspects

The purpose of this study is to improve understanding of the gold standard period in Portugal through comparison with other monetary systems that were operated afterwards. Portugal was the first country in Europe to join Great Britain in the gold standard, in 1854, and it adhered to it for quite a long time. The principle of free gold convertibility of the Portuguese currency at a fixed price was abandoned in 1891, even though the classical gold standard as an international monetary system only began to fall apart as a result of the upheavals of the First World War. For the purposes of a macroeconomic study, we can thus first look at the expansion of the functioning of the gold standard in Portugal up to 1913. In addition to a desire to share the same monetary system as its trading and financial partner, the low price of gold and the domestic circulation of British gold coins also played a part, along with other factors, in the adoption of the gold standard in Portugal. While it was in force, it provided a nominal stable anchor and a mechanism of credible commitment, even though Portugal’s monetary authorities broke the “rules of the game”. Our analysis points out the mistake of comparing the stability of different monetary systems with the same indicators. The application of a VAR model enabled us to isolate the period 1854-1891 as being the one that actually corresponds to what we expect of gold standard behaviour. Examination of demand, supply and monetary shocks yields interesting results that confirm the idea that the principles of classical economics are appropriate for the gold standard period.Gold Standard, Macroeconomic Stability, Convertibility, Portugal, VAR, Unit Roots

The Portuguese Public Finances and the Spanish Horse

This study is based on the idea that inadequate use of fiscal policy through restrictive policies shifts the short-run demand curve that in turn induces shifts in the long-run supply curve leading to a dynamic reduction of growth. The analogy with the old metaphor of the Spanish horse seems obvious. We apply this idea to Portugal to 2002-2009, we will prove that in order not to be caught in the horse’s trap we have to keep the concept of potential output in the evaluation of the structural budget balance instead of replacing it by a trend indicator, which, can lead to a sustainable reduction of the “food” and consequently to a disaster. The goal of full employment is no longer present in the idea of zero public balances. In the medium-term, the cycles will offset each other when calculated in relation to a trend and thus the same applies to budget balances as defined in the Stability and Growth Pact (SGP). If actual output moves away persistently from full employment output, trend output will also move away from full employment. As a consequence, expenditures will tend to increase and incomes to decrease. This situation creates deficits that should be corrected by the SGP. This correction will lead to a reduction in demand and thus in actual output and therefore, necessarily, in trend output itself. We present an empirical solution to this problem based on the concept of trend output in order to correct its inflection after 2002. This analysis has two drawbacks, the influence of deficits in the prices of non-tradable goods and the fact that we may not have food to give to our horse. This is the case if public debt is too high. Nevertheless, this study shows that the criteria and methods that are used by the SGP in the definition of fiscal policy are incorrect.Budget deficit, cyclically adjusted budget balance, fiscal policy, Hodrick-Prescott filter and output gap.

Earth-Science Education: From all over the World to East-Timor

Earth Science education (ESE) emerges as a relatively new research area and there is an unquestioned need for improving students´ abilities on that field (American Geological Institute, 2008), taking into account that it is important for students’ everyday lives and thus, relevant for scientific literacy. So, the inclusion of a section concerned with this issue, was a very wise decision of the 1st Geological Congress at East-Timor Organising Committee, revealing an up to date vision about education for the XXI century. The paper will be divided in four sections: - Science Education - meaning, epistemology and rationale; - Earth- science-education all over the World in the context of Science Education; - Earth- science education in East-Timor secondary school curriculum; - Earth-science education and challenges for the futur

Controlo de qualidade dos dados de posicionamento em reflexão sísmica de muito alta resolução

The quality control is a very important operation in the seismic data acquisition surveys and its main goals are to assess the quality of the acquired data, to detect problems during acquisition and finally to guarantee that the data has the required quality to be accepted for further processing, or if it must be rejected. The time spent in operations makes its cost to grow up and therefore the QC must be done efficiently and as early as possible., It is critical that the most relevant factors that can seriously compromise the data are evaluated onboard. Navigation quality control is extremely important because the navigation errors can contribute to the feathering effect that by itself is one of the main rejections criteria. On the other hand, the quality of the positioning data can have strong influence on the seismic resolution, as it is used to calculate positioning for every reflection point. Thus, wrong positioning data affect offsets computing and can move the reflection midpoints to erroneous position causing a discrepancy between the actual geology and the seismic section obtained. This causes errors in the exact location of boulders and the identification of other in-depth hazards that threat the optimization of wind turbine installations, which is one of Geosurveys goals in this type of surveys. The main sources of these problems are related to the bad functioning of GPS antennas used in the acquisition system and other systematic problems such as geometry assignment. There are typical errors which affect the geometry such as distance measurement between lead buoy center and first channel, distance measurements and assignment between channels in the different streamer sections. The solution proposed in this work consists on the development of effective methods to diagnose these types of problems, where through a graphical scheme it becomes possible to detect different types of positioning errors and their causes. The method developed in the scope of this work was based on the quality control of the offsets calculated with the positioning data and the direct arrivals time. With this information it was possible to establish a classification criterion for the positioning data according to its quality, to calculate the errors and obtain indicators about its source of error, always considering that the various factors have different influences on the errors and some problems appear more frequently than others. Based on this, rejection criteria for data with positioning errors was established and solutions were tested in the software packages RadExPro and Kingdom Suite, in order to evaluate the effect of these errors on the seismic volumes.O controle de qualidade é uma operação muito importante durante as campanhas de aquisição de dados sísmicos. Tem como objetivo avaliar a qualidade dos dados adquiridos, detetar problemas ocorridos durante a aquisição, e finalmente assegurar que os dados têm a qualidade necessária para serem aceites ou se devem ser rejeitados. O tempo de operação tem consequências diretas sobre os custos e, por esta razão, esta é uma operação que deve ser feita rapidamente. Assim, devem ser avaliados os fatores mais relevantes que podem comprometer seriamente a qualidade dos dados. O controle de qualidade da navegação é de extrema importância, visto que os erros de navegação contribuem para o feathering, que por sua vez constitui um dos principais critérios de rejeição. Por outro lado, a qualidade da navegação ou dos dados de posicionamento pode afetar fortemente a resolução sísmica pelo facto de serem usados para a determinação das posições das reflexões. Assim, dados de posicionamentos errados afetam os cálculos dos offsets e podem deslocar os pontos médios de reflexões para posições erradas, provocando uma discrepância entre a geologia real e a secção sísmica obtida. Deste modo, fica mais difícil a localização exata de blocos rochosos e a identificação de outros perigos em profundidade que colocam em risco a otimização das instalações das turbinas eólicas, trabalhos que a Geosurveys tem vindo a realizar. As principais causas na origem destes problemas estão relacionadas com o mau funcionamento das antenas GPS usadas no sistema de aquisição, e outros problemas sistemáticos, como a atribuição de geometria. Existem erros típicos que afetam a geometria, tais como o erro na medição da distância entre o centro da antena da lead buoy e o primeiro canal, e erros na medição e atribuição das distâncias entre canais para as diferentes secções dos streamers. A solução proposta neste trabalho passou pelo desenvolvimento de métodos eficientes para diagnóstico destes tipos de problemas, onde através de padrões gráficos se torna possível detetar diferentes tipos de erros de posicionamentos e as respetivas causas. O método desenvolvido baseou-se no controle de qualidade dos offsets calculados com os dados de posicionamento e no tempo de chegada das ondas diretas. Com essas duas informações foi possível estabelecer um critério de classificação dos dados de posicionamento quanto à sua qualidade, calcular os erros e obter indícios sobre a sua origem, levando sempre em consideração que os vários fatores têm diferentes influências sobre os erros e que alguns problemas são mais frequentes que outros. Com base neste procedimento, foram estabelecidos critérios de rejeição de dados com erros de posicionamento. As soluções obtidas foram testadas no software RadExPro e Kingdom Suite de modo a avaliar o efeito que esses erros têm sobre a sísmica.Mestrado em Engenharia Geológic

Entrepreneurial attitude, geographical isolation and university students - some evidence from the Atlantic

Some regions like Island of Madeira show high levels of firm birth rate. But the entrepreneurial experience is quite different from the European reality given the high level of micro-business owing o subsistence reasons, as a response to the reduced opportunity costs, the lack of profitable employment options and the high levels of unemployment. As a consequence the high level of entrepreneurship is only partially related to high tech innovative firms, qualified employment growth and economic diversification. The majority of the new firms are linked with traditional sectors (restaurants, boutiques, personal services and civil construction. Firm creation is also a result of the EU integration and cohesion policies. On the other hand infra-structure development policies explain the increasing importance of the public administration in terms of employment and consequently the low levels of unemployment. Traditionally, in the islands, the government intervention in terms of employment, economic planning is considered excessive. The island economies have been able to benefit from large streams of international solidarity in terms of high external aid per capita especially due to their strategic relevance. But the global economic and political change associated with the globalisation put increasing pressure on the island forcing them to reformulate their economic, social and political options. International donors and institutions like World Bank stresses issues such as economic diversification, economic and social modernisation and macroeconomic policies focused o supply side effects and the development of economic growth determining factors. Due to the reduced levels of international aid, islands are obliged to diminish levels of government intervention connected to public employment and direct production activities and to enhance private initiatives and entrepreneurship. In what concerns the outermost regions the EU enlargement demands increasing levels of competitivity, financial autonomy, economic diversification and entrepreneurial attitude. Given the lack of studies in this geographical area, the on-going economic, social and cultural modernisation induced by the integration in The EU sphere and the widespread perception about the changing times, we intend in this study to give some answers to the following questions: .how is the entrepreneurial attitude affected by the historical record of high levels of government intervention and public employment? .what kind of impacts results from the perceived “island penalty”, in terms of propensity towards entrepreneurship? .What is the main obstacle to the entrepreneurial event? .Should one wish to create a firm, what is the probability of the stated preference is in the high tech sectors? What kind of support will be required and welcomed from the public institutions? Studies and academic studies in islands have some advantages. The agglomeration of institutions, populations, firms and social networks in a reduced geographical space enable us to capture in some detail a vast group of variables, relationships and cause effects linked to a specific subject. Islands societies have a large and cohesive social capital, and share a homogenous set of values and cultural attitudes, which facilitates experiences of collective action. To conduct an empirical test in order to find out the most influential variables in the entrepreneurship attitude we use logit equations. The sample is made up of local university students, theoretically the most apt in developing innovative firms. We investigate also the differences between economics and managements and humanities students in terms of entrepreneurship propensity. An important matter in isolated, peripheral and underdeveloped regions is the diffusion of innovations. Consequently, student’s sources of information and knowledge regarding the overall tendencies of profitable, innovative and fashionable entrepreneurial experiences must be identified. Therefore, this paper describes the changing and uncertain economic and political environment faced by islands societies. A contextualisation of the relationship between entrepreneurship, economic growth and insular penalty is stretched and lastly, we provide an empirical study related to the entrepreneurial attitude in an insular region: The Island of Madeira.

Exchange Rate Target Zones: A Survey of the Literature

This work selectively reviews the literature on exchange rate target zones and their theoretical and empirical methodologies and examines whether they can be used to clarify to what extent this type of exchange rate regime could contribute to greater exchange rate stability. We discuss the main contributions of the first and second generations of exchange rate target zone models. In an attempt to reconcile the poor empirical performance of the Krugman (1991) model with the reality of exchange rate target zone regimes, this line of research integrates target zones with alternative underlying economic models, such as imperfect credibility, intra-marginal interventions and sticky price models. It was thus possible to understand the correlations observed between the exchange rate, its fundamentals determinants and the interest rate differential, and to explain the fact that the statistical distribution of the exchange rate is hump-shaped rather than U-shaped. This implies that the initial emphasis of target zone models on nonlinearities, “honeymoon effect”, “smooth pasting” and marginal interventions has vanished. Exchange rate target zones are better described as similar to managed floating regimes with intra-marginal interventions, with some marginal interventions when the exchange rate reaches the edges of the floating band.Exchange rate target zones, imperfect credibility, intra-marginal interventions realignments and sticky prices.

Exchange Rate Mean Reversion within a Target Zone: Evidence from a Country on the Periphery of the ERM

The aim of this study is to assess to what extent the Portuguese participation in the European Monetary System (EMS) has been characterized by mean reverting behaviour, as predicted by the exchange rate target zone model developed by Krugman (1991). For this purpose, a new class of mean reversion tests is introduced. The empirical analysis of mean reversion in the Portuguese exchange rate shows that most of the traditional unit root and stationarity tests point to the nonstationarity of the exchange rate within the band. However, using a set of variance-ratio tests, it was possible to detect the presence of a martingale difference sequence. This suggests that the Portuguese foreign exchange market has functioned efficiently, allowing us to conclude that the adoption of an exchange rate target zone regime has contributed decisively to the creation of the macroeconomic stability conditions necessary for the participation of Portugal in the euro area.difference sequence, mean reversion, stationarity, target zones and unit roots