Accounting for Spanish business cycles

Jesús Rodríguez-López () and Mario Solis-Garcia

No 14.05, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: We apply the business cycle methodology proposed by Chari, Kehoe, and McGrattan (2007) to identify the sources of Spanish business fluctuations during two outstanding cyclical episodes: the recession alongside the transition to democracy in 1977 and the great recession of 2008. We find that the labor wedge plays a key role during both recessions and that taxes and labor market institutions are likely behind the wedge movements. We conclude that any model that tries to understand the causes of recessions that occurred in the last three decades should focus on the labor wedge.

Keywords: Business cycle accounting; efficiency wedge; labor wedge; investment wedge (search for similar items in EconPapers)
JEL-codes: E32 O11 O41 O47 O53 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2014-06
New Economics Papers: this item is included in nep-bec, nep-dge, nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ACCOUNTING FOR SPANISH BUSINESS CYCLES (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:14.05

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