The Portuguese budgetary costs with First World War: a comparative perspective

Abstract

Abstract In this paper, I show that the Portuguese budgetary costs with the First World War represented, on average, practically 50% of state expenditure and 7% of GDP during 1914–1918. These costs caused different negative effects on public finances and were also negatively correlated with economic growth according to the estimated results of two dynamic models. Nevertheless, Portugal’s costs with this war appear to have been lower than those of the other belligerents for which data are available, as Austria-Hungary, Bulgaria, France, Greece, Great Britain, Italy, and the United States.