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A supermultiplier demand-led growth accounting analysis applied to the Spanish economy (1998–2019)

Author

Listed:
  • Héctor Labat-Moles

    (N/A)

  • Ricardo Summa

    (N/A)

Abstract

In this paper, we analyse the demand-led determinants of Spanish economic growth from 1998–2019. We apply the supermultiplier demand-led growth accounting methodology by Freitas/Dweck (2013) with two modifications: First, we incorporate consumption out of public transfers, following Haluska et al. (2021) and Haluska (2023). Second, we incorporate consumption out of public wages as a source of autonomous demand, theoretically suggested by Serrano/Pimentel (2019). Our demand-led growth decomposition highlights: (i) public demand and exports as important stable growth drivers, and a decreasing supermultiplier that reduces growth rates; (ii) the indirect effect of a real estate boom in the economic expansion of 1998–2008 caused by increasing public revenues and opening space to the expansion of public demand; and (iii) the incapacity of exports to lead the recovery alone, as the latter started only with the resumption of the public and private demand.

Suggested Citation

  • Héctor Labat-Moles & Ricardo Summa, 2024. "A supermultiplier demand-led growth accounting analysis applied to the Spanish economy (1998–2019)," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 21(1), pages 42-72, April.
    • Handle: RePEc:elg:ejeepi:v:21:y:2024:i:1:p42-72
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    More about this item

    Keywords

    supermultiplier; demand-led growth accounting; Spanish economy;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory

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