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

The balance of payments can act as a constraint to the rate of growth of output, on setting a limit to the growth of 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 one-and-a-half century, i.e., the period 1850-2000. Our results show that the foreign sector would have worked as a constraint to growth only during some periods of remarkably high growth in comparison with the Western European average, such as 1914-1935, and, especially, 1950-1975.Economic growth, External deficit, Spanish economy.

VULNERABILITY TO SHOCKS IN EMU: 1991-2004

In this paper we analyze the nature of the shocks hitting the EMU member countries over the period 1991-2004, as well as for the two subperiods before and after 1999, i.e., the start of EMU. To this end, we first evaluate the relative importance of symmetric vs. asymmetric shocks, and then extract their temporary component. Our final aim would be assessing the vulnerability of the EMU countries to temporary and asymmetric shocks, which would be the most harmful case for the operation of a monetary union.Monetary union, EMU, asymmetric shocks, temporary shocks

Foreign Direct Investment in a Process of Economic Integration: The Case of Spanish Manufacturing, 1986-1992

In this paper we analyze the main characteristic features of foreign direct investment (FDI) directed to Spanish manufacturing, both across industries and through time, for the years 1986- 1992. During this period, Spain was one of the most important recipients of FDI inflows in the world, coinciding with the first years of integration into the European Union and the prospects about the completion of the Single European Market by 1992. To this end, a relative FDI measure is related to several industry indicators, as well as to some macroeconomic variables, which allows us to obtain a general characterization of FDI in Spanish manufacturing over that period.Foreign direct investment, Spanish manufacturing industry, European integration

Vulnerability to Shocks in EMU: 1991–2004 (in English)

The authors analyze the nature of economic shocks hitting European Economic and Monetary Union (EMU) member countries from 1991 to 2004, as well as for two sub-periods before and after the launch of EMU. To this end, they first evaluate the relative importance of symmetric versus asymmetric shocks, and then extract their temporary component. Their final aim would be assessing the vulnerability of EMU to transitory asymmetric shocks, that is, to the most harmful situation for the operation of a monetary union. Overall, the authors´ results show that in the period of analysis, symmetric shocks predominated over asymmetric shocks, but the temporary component of asymmetric shocks was higher than that of symmetric shocks.Monetary union, EMU, asymmetric shocks, temporary shocks

INSURANCE MECHANISMS AGAINST ASYMMETRIC SHOCKS IN A MONETARY UNION: A PROPOSAL WITH AN APPLICATION TO EMU

In this paper we propose a simple, automatic insurance mechanism designed to cope with asymmetric shocks in a monetary union, which could be used as starting point of a more elaborated policy instrument. The mechanism would use as indicator of the occurrence of a shock the changes in the unemployment rate of the countries belonging to the union, and would be financed through a fund built from contributions of these countries as a percentage of their tax receipts. The fund would be distributed among the countries affected by a negative asymmetric shock according to the proportion in which every one of them would have been affected by the shock. Our proposal is illustrated by means of an empirical application to the case of EMU.Monetary union, asymmetric shocks, insurance function

CHARACTERIZING MACROECONOMIC SHOCKS IN THE CEECs

In this paper we analyze the nature of the shocks hitting the CEECs over the recent years. To this end, we first evaluate the relative importance of symmetric vs. asymmetric shocks, and then extract their temporary component. Our final aim would be assessing the vulnerability of the CEECs to temporary and asymmetric shocks, which would be the most harmful case for the operation of a monetary union. Finally, a comparison with the case of the current EMU members is also presented.Monetary union, Central and Eastern European countries, asymmetric shocks, temporary shocks

A GENERAL FRAMEWORK FOR THE MACROECONOMIC ANALYSIS OF MONETARY UNIONS

The objective of this paper is to develop a general framework for the macroeconomic modelling of monetary unions, which could be useful for policy analysis, as well as for teaching purposes. Our starting point will be the standard twocountry Mundell-Fleming model with perfect capital mobility, extended to incorporate the supply side, and modified so that the money market is common for two countries forming a monetary union. The model is presented in two versions: for a small and a big monetary union, respectively. After solving each model, we will derive multipliers for monetary, real (i. e., demand-side), supply, and external shocks, paying a special attention to the distinction between symmetric and asymmetric shocks. A graphical analysis is also provided.

Assessing the impact of foreign direct investment on regional growth - An analysis of the Spanish case

The massive increase in foreign direct investment inflows following the Spanish integration with the now European Union in 1986, has been one of the most important features shaping the behaviour of the Spanish economy in the last twenty years. In this paper we will try to provide an assessment of its impact on regional economic growth, using data for the 17 Spanish regions, from 1986 on. To that end, we will estimate an aggregate production function where the foreign-owned capital stock is included as an additional factor.

Do exports cause growth? Some evidence for the new EU members

In this paper, we analyze the relationship between international trade and economic growth, from the point of view of one of the most traditional hypothesis within this field, namely, the export-led growth hypothesis. To this end, we apply Grangercausality tests, in a cointegration framework, to data on exports and GDP of the eight CEECs that became members of the EU in 2004.Economic growth, Exports, Transition countries