Long-Run and Business Cycle Factors of the Spanish Economy

Abstract

The construction of a model for simulation and policy evaluation of the Spanish economy constitutes a far-reaching project. This research task involves the specification of the behavioural equations that better describe the economy, as will be explained in the next chapter. Growth and cyclical regularities impose several restrictions on the specification and calibration of a useful general equilibrium model. For this reason much effort is needed in the analysis of the long-and short-run stylised factors of the Spanish economy. Thus throughout this chapter we shall study what has been behind the pattern of growth of the Spanish economy in recent decades, what has determined its labour productivity and what are the special features characterising business cycles in Spain.