Spain in the euro: a general equilibrium analysis
Javier Andrés (),
Samuel Hurtado (),
Eva Ortega () and
Carlos Thomas ()
No 927, Working Papers from Banco de España
This paper analyzes the determinants of Spain's macroeconomic fluctuations since the inception of the euro in 1999, with a special attention to observed growth and inflation differentials with respect to the rest of the European Monetary Union (EMU). For that purpose we estimate the Banco de España DSGE model of the Spanish economy and the rest of the Eurosystem (BEMOD). We find that observed differentials are the result of a combination of asymmetric country-specific shocks (in particular, demand and productivity shocks for growth and cost-push shocks for inflation) as well as asymmetric economic structure (especially lower nominal wage and price rigidities in Spain). Finally, we find that EMU membership has had a non-negligible effect on observed differentials.
Keywords: DSGE model; monetary union; growth and inflation differentials; Bayesian inference (search for similar items in EconPapers)
JEL-codes: C11 C51 E17 (search for similar items in EconPapers)
Pages: 47 pages
New Economics Papers: this item is included in nep-dge and nep-lab
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Journal Article: Spain in the Euro: a general equilibrium analysis (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0927
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