The microeconomic origins of the Spanish boom

Enrique Moral-Benito

No 1805, Occasional Papers from Banco de España

Abstract: The Spanish growth experience over the 1995-2007 period was characterized by the remarkable surge in employment and investment as well as the dismal evolution of productivity. These macroeconomic fluctuations were coupled with an unprecedented credit boom fueled by a housing bubble. This article reviews a line of research that investigates the connection between these developments using micro-level data on Spanish firms and banks. The evidence suggests that the abundant availability of credit, partially induced by the real estate bubble, and its propagation through the Spanish production network explain a sizable part of the massive accumulation of labor and capital. Also, the deterioration in the allocation of resources across firms is the main responsible of the fall in aggregate productivity. The allocation of credit across firms and municipalities, the softening of banks lending standards, and the low productivity of Spanish firms can partly explain this deterioration.

Keywords: Spain; firm level data; TFP; misallocation; input-output linkages (search for similar items in EconPapers)
JEL-codes: D24 E44 G21 L25 O11 O47 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2018-05
New Economics Papers: this item is included in nep-eff, nep-eur, nep-fdg, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:1805

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