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The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850–2000

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  • Bajo-Rubio, Oscar

Abstract

The balance of payments can act as a constraint on the rate of growth of output, since it puts a limit on the growth in the level of demand to which supply can adapt. In this paper, we examine this issue for the case of Spain, using time series data extending over the period 1850–2000. Overall, the external deficit does not seem to have worked as a constraint on the growth of the Spanish economy over the long run, unless some shorter and specific subperiods, such as 1940–1959 and 1959–1974. The Spanish economy seems to have used external deficits to smooth her level of aggregate consumption, which would be supported by the finding of sustainability of current account deficits along the period of analysis.

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  • Bajo-Rubio, Oscar, 2012. "The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850–2000," Explorations in Economic History, Elsevier, vol. 49(1), pages 105-117.
  • Handle: RePEc:eee:exehis:v:49:y:2012:i:1:p:105-117
    DOI: 10.1016/j.eeh.2011.11.001
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    Cited by:

    1. Oscar Bajo-Rubio & Carmen Díaz-Roldán, 2015. "Economic Growth and the Balance-of-Payments Constraint: The Case of the Spanish Regions, 1988–2009," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 617-628, December.
    2. Bajo-Rubio, Oscar, 2020. "Exports and long-run growth: The case of Spain, 1850-2017," GLO Discussion Paper Series 461, Global Labor Organization (GLO).
    3. Prados de la Escosura, Leandro, 2009. "Spain's International Position, 1850-1913," CEPR Discussion Papers 7591, C.E.P.R. Discussion Papers.
    4. Oscar Bajo-Rubio & Vicente Esteve, 2017. "Optimality of the current account of the Spanish economy, 1850-2015," Working Papers 1710, Department of Applied Economics II, Universidad de Valencia.

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    More about this item

    Keywords

    Economic growth; External deficit; Spanish economy;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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