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Causes and Consequences of the Spanish Economic Crisis: Why the Recovery is Taken so Long?

Author

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  • Francisco Carballo-Cruz

    () (NIPE and School of Economics and Business, University of Minho, Portugal)

Abstract

Spain is currently facing its worst crisis in the last fifty years. The crisis began as an extension of the international financial crisis, but the internal imbalances accumulated in the pre-crisis period aggravated the situation. At present their incomplete adjustment is making difficult the economic recovery. This paper describes the evolution of the economic crisis in Spain. The real estate sector and the banking sector are analysed in detail, as they played a key role in the detonation and the deepening of the crisis. The results of the main reforms carried out so far are also carefully examined. It also discusses the main factors that have delayed the economic recovery up to now (unemployment and indebtedness), and present some alternatives to define an exit strategy.

Suggested Citation

  • Francisco Carballo-Cruz, 2011. "Causes and Consequences of the Spanish Economic Crisis: Why the Recovery is Taken so Long?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(3), pages 309-328, September.
  • Handle: RePEc:voj:journl:v:58:y:2011:i:3:p:309-328
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    References listed on IDEAS

    as
    1. Kosta Josifidis & Alpar Lošonc & Novica Supić, 2010. "Neoliberalism: Befall or Respite?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(1), pages 101-117, March.
    2. Edda Zoli & Silvia Sgherri, 2009. "Euro Area Sovereign Risk During the Crisis," IMF Working Papers 09/222, International Monetary Fund.
    3. Georgios P. Kouretas & Prodromos Vlamis, 2010. "The Greek Crisis: Causes and Implications," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 391-404, December.
    4. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2008. "Two-tier Employment Protection Reforms: The Spanish Experience," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(4), pages 49-56, December.
    5. Jean Pisani-Ferry, 2010. "Euro area governance: What went wrong in the euro area? How to repair it?," Policy Contributions 410, Bruegel.
    6. João Sousa Andrade & Adelaide Duarte, 2011. "The Fundamentals of the Portuguese Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 195-218, June.
    7. Jesús Fernández-Villaverde & Lee Ohanian, 2010. "The Spanish Crisis from a Global Perspective," Working Papers 2010-03, FEDEA.
    8. repec:ces:ifodic:v:6:y:2008:i:4:p:14567215 is not listed on IDEAS
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    More about this item

    Keywords

    Crisis; Real estate; Banking; Debt problems; Unemployment; Public debt;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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