Bubble economics and structural change: the cases of Spain and France compared
Author
Agnese, Pablo
Hromcová, Jana
Publication date
2018ISSN
1748-7870
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.
Document Type
Article
Document version
Published version
Language
English
Subject (CDU)
33 - Economics. Economic science
Keywords
Canvi estructural
Bombolla
Tipus d'interès de l'atur
Productivitat
Cambio estructural
Burbuja
Tasa de interés de desempleo
Productividad
Structural change
Bubble
Unemployment interest rate
Productivity
Pages
20
Publisher
Taylor & Francis
Collection
21; 1
Is part of
Journal of Economic Policy Reform
Citation
Agnese, Pablo; Hromcová, Jana. Bubble economics and structural change: the cases of Spain and France compared. Journal of Economic Policy Reform, 2016, 21(1), p. 59-79. Disponible en: <https://www.tandfonline.com/doi/abs/10.1080/17487870.2016.1213167>. Fecha de acceso: 26 feb. 2024. DOI: 10.1080/17487870.2016.1213167
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