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

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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

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    Cited by:

    1. Markus K. Brunnermeier & Isabel Schnabel, 2014. "Bubbles and Central Banks: Historical Perspectives," Working Papers 1411, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 31 Oct 2014.
    2. Jesús Ferreiro & Carmen Gómez, 2014. "Implementing a Voluntary Wage Policy: Lessons from the Irish and Spanish Wages Policies before the Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(1), pages 107-127, Februar.
    3. Juan Carlos Cuestas & Karsten Staehr, 2014. "The great (De)leveraging in the GIIPS countries. Domestic credit and net foreign liabilities 1998–2013," Bank of Estonia Working Papers wp2014-4, Bank of Estonia, revised 10 Oct 2014.
    4. repec:voj:journl:v:63:y:2016:i:1:p:87-112 is not listed on IDEAS
    5. Gila-Gourgoura, E. & Nikolaidou, E., 2017. "Credit Risk Determinants in the Vulnerable Economies of Europe: Evidence from the Spanish Banking System," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 10(1), pages 60-71, March.
    6. STOIAN, Andreea, 2012. "The Study Of Fiscal Sustainability For The Case Of Overindebted European Countries," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 16(4), pages 43-62.
    7. repec:voj:journl:v:64:y:2017:i:1:p:1-16 is not listed on IDEAS
    8. Karl Aiginger, 2013. "A New Strategy for the European Periphery," WIFO Working Papers 443, WIFO.
    9. Larry D. Wall, 2012. "Central banking for financial stability Some lessons from the recent instability in the US and euro area," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 8(3), pages 247-280, August.
    10. repec:ilo:ilowps:483344 is not listed on IDEAS
    11. Molina, Oscar. & Miguélez, Fausto., 2013. "From negotiation to imposition : social dialogue in austerity times in Spain," ILO Working Papers 994833443402676, International Labour Organization.
    12. Murcia López, Guillermo & Delclós Clanchet, Jordi & Ubalde López, Mònica & Calvo Bonacho, Eva & Benavides, Fernando G., 2016. "Has the Spanish economic crisis affected the duration of sickness absence episodes?," Social Science & Medicine, Elsevier, vol. 160(C), pages 29-34.
    13. Michelle Norris & Michael Byrne, 2015. "Asset Price Keynesianism, Regional Imbalances and the Irish and Spanish Housing Booms and Busts," Working Papers 201514, Geary Institute, University College Dublin.
    14. Philip Arestis & Ana Rosa González-Martínez, 2015. "Is Job Insecurity a Driver of the Housing Cycle? Some Evidence in the Spanish Case," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(1), pages 1-14, March.
    15. Escobar, Cristina & Kallas, Zein & Gil, José María, 2015. "Impact of the economic and the political changes on consumers' wine preferences in Catalonia (Spain): a generalized multinomial logit approach," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202730, European Association of Agricultural Economists.
    16. Juan Carlos Cuestas & Karsten Staehr, 2015. "The Great Leveraging in the GIIPS Countries: Domestic Credit and Net Foreign Liabilities," Working Papers 2015012, The University of Sheffield, Department of Economics.
    17. Philip Arestis & Ana Rosa González, 2014. "The Housing Market-Bank Credit Relationship: Some Thoughts on Its Causality," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(2), pages 145-160, March.
    18. repec:pab:rmcpee:v:24:y:2018:i:1:p:292-339 is not listed on IDEAS
    19. Wall, Larry D., 2012. "Central Banking for Financial Stability: Some Lessons from the Recent Instability in the United States and Euro Area," ADBI Working Papers 379, Asian Development Bank Institute.
    20. Projektgruppe Gemeinschaftsdiagnose, 2012. "Deutsche Konjunktur im Aufwind – Europäische Schuldenkrise schwelt weiter," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(08), pages 03-72, April.
    21. Jorge Guardiola & Monica Guillen-Royo, 2015. "Income, Unemployment, Higher Education and Wellbeing in Times of Economic Crisis: Evidence from Granada (Spain)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 395-409, January.
    22. Rocío Cascajo & Lourdes Diaz Olvera & Andrés Monzon & Didier Plat & Jean-Baptiste Ray, 2018. "Impacts of the economic crisis on household transport expenditure and public transport policy: Evidence from the Spanish case," Post-Print halshs-01672812, HAL.
    23. Bulbarelli, Miriam, 2016. "The housing finance system in Italy and Spain: Why did a housing bubble develop in Spain - and not in Italy?," PIPE - Papers on International Political Economy 26/2016, Free University Berlin, Center for International Political Economy.
    24. Karl Aiginger, 2013. "A Southern Europe strategy based on vision and industrial policy," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 82(01), pages 127-168.

    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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