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Recent changes in investment in Spain from a macroeconomic perspective

Author

Listed:
  • Pablo Aguilar

    (Banco de España)

  • Corinna Ghirelli

    (Banco de España)

  • Blanca Jiménez-García

    (Banco de España)

Abstract

Rationale Cyclical fluctuations in investment are usually sharper than fluctuations in other components of aggregate demand. This article aims to analyse, based on an econometric model, the role played by interest rates, demand and agents’ confidence (the drivers traditionally studied in the literature) in the behaviour of investment under such atypical cyclical circumstances as those derived from the pandemic and the energy crisis. Takeaways •The results show that investment responds negatively to interest rate rises, while enhanced agents’ confidence and greater demand have the opposite effect. •In the absence of new shocks, the bulk of the impact of interest rates on investment occurs with a lag of several quarters, whereas agents’ confidence and demand operate with shorter lags. Given these lags, the interest rate increases and the decline in confidence which took place in 2022 appear to have had a negative effect on investment in 2023, partially offset by the positive impact of the buoyancy of demand recorded last year. •In order to analyse the changes in investment, the effects deriving from any shocks that may arise this year, including those deriving from the variables analysed in this article and other shocks not addressed in this model, should be added to the above-mentioned effects.

Suggested Citation

  • Pablo Aguilar & Corinna Ghirelli & Blanca Jiménez-García, 2023. "Recent changes in investment in Spain from a macroeconomic perspective," Economic Bulletin, Banco de España, issue 2023/Q3.
    • Handle: RePEc:bde:journl:y:2023:i:03:n:03
    DOI: https://doi.org/10.53479/30733
    as

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    References listed on IDEAS

    as
    1. Ghirelli, Corinna & Pérez, Javier J. & Urtasun, Alberto, 2019. "A new economic policy uncertainty index for Spain," Economics Letters, Elsevier, vol. 182(C), pages 64-67.
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    More about this item

    Keywords

    Investment; impulse response function; monetary policy; confidence;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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