Reducing Spanish unemployment under the EMU
AbstractSpain enter the EMU with an unemployment rate roughly ten percentage Points higher than the Euro average - 19% versus 9%. Can it reasonably hope to eliminate this differential and join its Euro partners in further lowering unemployment? If so, how long will it take? And what will it take? The Spanish economy has grown at close to 3% per year, and the unemployment rate has fallen by 4 points, from 23% in 1995 to 19% in 1998. This has given hope to those who think that unemployment can indeed be lowered at a steady pace. However, Spain has just gone on the Euro. Spain will now have the same interest rate as its Euro-partners. And the margin of maneuver on the other macroeconomic instrument, fiscal policy, will reamin very limited. Spain will have to decrease its unemployment rate, with one of its two hand to decrease its unemployment rate, with one of its two hands tied behind its back. This seems a tough challenge. First, Spain has to grow much faster than its Euro-partners. Second, this growth has to meet some conditions. Banced growth requires a change in the composition of demand, a lower share of consumption and government expenditures and a higher share of investment. Moreover, Spain will have to achieve a lower inflation rate than its partners, perhaps even deflation. The least it can be said is that it may not be easy. There lies the challenge facing Spain under EMU.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by FEDEA in its series Working Papers with number 99-02.
Date of creation:
Date of revision:
Contact details of provider:
Web page: http://www.fedea.net
Other versions of this item:
- NEP-ALL-1999-05-10 (All new papers)
- NEP-LAB-1999-05-10 (Labour Economics)
- NEP-LTV-1999-07-14 (Unemployment, Inequality & Poverty)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Samuel Bentolila & Juan F. Jimeno, 2003.
"Spanish Unemployment: The End of the Wild Ride?,"
CESifo Working Paper Series, CESifo Group Munich
940, CESifo Group Munich.
- Gilles Saint Paul & Samuel Bentolila, 2000.
"Will EMU increase eurosclerosis?,"
Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra
449, Department of Economics and Business, Universitat Pompeu Fabra.
- Saint-Paul, G. & Bentolila, S., 2000. "Will EMU Increase Eurosclerosis?," Papers, Centro de Estudios Monetarios Y Financieros- 0004, Centro de Estudios Monetarios Y Financieros-.
- Bentolila, Samuel & Saint-Paul, Gilles, 2000. "Will EMU Increase Eurosclerosis?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2423, C.E.P.R. Discussion Papers.
- Juncal Cunnado & Fernando PErez De Gracia, 2003. "Sacrifice Ratios: Some lessons from EMU countries, 1960-2001," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 17(3), pages 327-337.
- Gómez García, F. & Rebollo Sanz, Y. & Usabiaga Ibáñez, C., 2002. "Nuevas estimaciones de la NAIRU de la economía española: métodos directos," Estudios de Economía Aplicada, Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 20, pages 509-530, Diciembre.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmen Arias).
If references are entirely missing, you can add them using this form.