Vol. 1, n.º 2 - September 2002

Jenny E. Ligthart Public Capital and Outpout Growth in Portugal: An Empirical Analysis Sergi Jiménez-Martin and Juan Prieto-Rodríguez Patterns of Work and Retirement of Older Workers in Spain and Portugal Horácio Faustino The Intra-Industry Trade Between Portugal and Spain in the 90s: The Competitive Cluster Ivan Samson Establishement of a Common European Economic Area as a factor of Russia's' Sustainable Growth

	Article:	Public Capital and Outpout Growth in Portugal:   An Empirical Analysis
	Author:	Jenny E. Ligthart * * Economist, Fiscal Affairs Department, International Monetary Fund, 700 19th Street, N. W., Washington, D.C. 20431, U.S.A.. Phone: (+1)-202-623-5355, fax: (+1)-202-623-4199.
	Abstract:	The paper investigates the growth effects of public capital in Portugal using annual data for the period 1965-95. Both a production function and a vector autoregressive model are estimated. Public capital is shown to be a significant long-term determinant of output growth. The size of the estimated production elasticity indicates, in line with studies for other countries, a substantial growth payoff from public investment. Disaggregating public capital shows that investment related to, among other things, roads, railways, and airports is more productive than public investment in other major categories. JEL Classification Numbers: H540 Key words: cointegration, granger causality, infrastruçture, public investment.

	Article:	Patterns of Work and Retirement of Older Workers   in Spain and Portugal
	Authors:	Sergi Jiménez-Martin a and Juan Prieto-Rodríguez b a Universidad Pompeu Fabra and Universidad Carlos III, Spain b Instituto de Estudios Fiscales and Universidad de Oviedo, Spain
	Abstract:	In many OECD countries, there is a growing concern over future demographic trends and their consequences for the sustainability of the current Social Security systems. In this paper, we analyze this problem in Spain and Portugal. We first describe the main features of the Spanish and Portuguese labor markets and we also analyze the current situation and perspectives of older people/workers in relation to the Social Protection system. We present simulation results for the Spanish and Portuguese Social Security systems and we analyze workers' incentives to retire, depending on income and years of contribution. Finally, we illustrate two potential reforms of the Spanish system that would shift it in the Portuguese direction. The first attempts to reduce early retirement incentives, while the second seeks to increase incentives to remain in the labor market after reaching the normal retirement age. JEL Classification: H55, J11, J14, J26 Key words: Social Security, pensions, ageing, retirement decisions..

	Article:	The Intra-Industry Trade Between Portugal   and Spain in the 90s: The Competitive Cluster
	Author:	Horácio Faustino * * Instituto Superior de Economia e Gestão.
	Abstract:	The objective of this paper is to identify the cluster of products in which Portugal had intra-industry competitive advantages with low adjustment costs in relation to Spain during the last decade. To achieve this objective, we applied a new methodology that combines the Grubel and Lloyd intra-industry trade (IIT), and the Brulhart and EIliot marginal IIT index for the same products, as well as making the distinction between horizontal intra-industry trade (HIIT) and vertical intra-industry trade (VIIT). JEL Classification: F1, C0 Key words: competitive cluster, intra-industry trade, marginal intra-industry trade, horizontal intra-industry trade, vertical intra-industry trade, comparative advantage, adjustment costs.

	Article:	Establishement of a Common European Economic Area   as a factor of Russia's' Sustainable Growth
	Author:	Ivan Samson * * RECEP director. Espace Europe Institute. University Pierre Mendes France, Grenoble http://www.upmf-grenoble.fr/espace-europe/
	Abstract:	The idea of integration between the European Union and Russia within a "Common European Economic Area" is now at the top of the agenda in the dialogue between the EU and Russia. This confirms the fact that the EU considers Russia as a strategic partner. What this Common European Economic Area (CEEA) could be remains largely to be defined. This paper aims to argue that the CEEA is not only a positive development for the economic growth of Russia, but that it is a condition for the country's sustainable growth and productivity increase. The paper then discusses the options for defining the CEEA in the most relevant way for Russia and the main conditions for succeeding in this strategy. JEL Classification: E22, F130, F150, F2l0, F430, 011