Bubble economics and structural change: the cases of Spain and France compared

Pablo Agnese and Jana Hromcová

Journal of Economic Policy Reform, 2018, vol. 21, issue 1, 59-79

Abstract: This paper delves into the recent events that led to the formation of the housing bubble in Spain and the resulting structural change that is arguably needed to put the economy back into the right track. For this purpose, we calibrate a model with different equilibria descriptive of the labor markets in Spain and France, where the unemployment rates went from the same initial spot to very different levels. In addition to this, we run a counterfactual analysis that throws some more light on the performance of the Spanish labor market and the housing bubble. Our results suggest that the unemployment rate in Spain has jumped to much higher levels while switching between equilibria or, what is the same, because of structural change. Moreover, our counterfactuals indicate that, first, there has been an important misdirection of resources into the construction industry mainly fueled by excessively low real interest rates and, second, the Spanish labor reform has fallen short of its own goals.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/17487870.2016.1213167 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Bubble Economics and Structural Change: The Cases of Spain and France Compared (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jecprf:v:21:y:2018:i:1:p:59-79

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GPRE20

DOI: 10.1080/17487870.2016.1213167

Access Statistics for this article

Journal of Economic Policy Reform is currently edited by Dr Judith Clifton

More articles in Journal of Economic Policy Reform from Taylor and Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().