Dear colleague,

The next research seminar, which you are invited to attend, will take place on 30th of October, 11h30, Américo Amorim Building (Room 4), and will be presented by António Afonso, on the topic “Fiscal Episodes, Technological Progress and Market Power”.

António Afonso (a), João Tovar Jalles (b)
(a)University of Lisbon - ISEG (School of Economics and Management)
(b) International Monetary Fund, Fiscal Affairs Department

António Afonso has a Ph.D. in Economics from the Technical University of Lisbon and is Full Professor of Economics in the Department of Economics of ISEG/UL - University of Lisbon. He is currently the President of UECE - Research Unit on Complexity and Economics, coordinator of the Master in Monetary and Financial Economics, and coordinator of the PhD in Economics. He was previously Principal Economist at the European Central Bank, Senior Economist at CGD, BNU, and at IGCP, and Consultant and Adviser at the Ministry of Finance. He was also consultant to the IADB, the European Court of Auditors and the IMF. His research interests include fiscal policy, applied economics, macroeconomics and financial economics, and he has published more than 70 papers in academic journals such as: Applied Economics Letters; Applied Economics; Economic Modelling; Empirica, Empirical Economics; European Journal of Political Economy; FinanzArchive; Journal of Applied Economics; International Journal of Finance and Economics; International Review of Economics and Finance; Journal of Banking and Finance; Journal of International Money and Finance; Journal of International Financial Markets, Institutions & Money; Public Choice Regional Studies; Review of World Economics. He has co-authored books on introductory financial economics, economics and public finances, and monetary and financial economics, and several chapters in books.


We assess the impact of fiscal adjustments (and technology) on the evolution of markups in a panel of 14 OECD countries. We allow for smooth changes in the technological parameters by generating measures of TFP compatible with markups and assess the interaction between the two variables. Our results with narrative action-based data show counter-cyclicality since negative fiscal shocks increase markups. Moreover, in times of economic contraction the degree of counter-cyclicality of negative (positive) government spending (tax) shocks is larger than during economic expansions. In addition, markups have a pro-cyclical behaviour after a productivity shock. However, when identifying fiscal consolidations using changes of the cyclically adjusted primary balance, one obtains expansionary effects and a pro-cyclical behaviour in terms of markups and aggregate demand shocks.

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Please confirm your attendance until October 29th by e-mailing Mara Carvalho (

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