Portuguese banks and the economic adjustment programme: balance sheet adjustments and impact on profitability

Double Degree. A Work Project presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics and a Masters Degree in Finance from Louvain School of Management

Wage adjustments under extreme downward nominal wage rigidity

Using a rich and highly accurate dataset for Portugal spanning from 1986 to 2013, this paper analyzes the determinants of downward nominal wage rigidity, mainly focusing on macroeconomic factors. The data supports the hypothesis that recessionary periods alongside with low in ation contribute to a higher degree of wage rigidity, as measured by the incidence of nominal wage freezes. It is further highlighted how this lack of wage adjustments con- tributed to an increase in labor costs which culminated in a wage markup of 6-7%. This paper, thus seems to corroborate the argument that low in ation did exacerbated the downward in exibility of (real) wages after the Great Recession.