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Lesson 3: The current financial crisis

Thursday 22 September 2016, by Carlos San Juan

This lesson try to recover the views of the crisis from Spanish research services and the European Commission including the following presentation and reports: The Outlook for the Global Economy and for Spain by Rafael Doménech and the reports of the Bank of Spain at the beginning of the crisis chapters first Overview of the Financial Crisis and second The Crisis and the Potential Growth of the Spanish Economy and the last update form the Bank of Spain Annual Report. Finally some comparisons of the policy response of the crisis are reported.

In-depth review for SPAIN

Author: COMMISSION STAFF WORKING DOCUMENT, Brussels, 10.4.2013 SWD(2013) 116 final

Panic-driven Austerity In The Eurozone And Its Implications.

PAUL DE GRAUWE AND YUEMEI JI, S,ocial Europe Journal 25/02/2013


Bank of Spain Annual Report last publication

For an up-date analysis of the current situation of the economy see the Bank of Spain Last publication of the Annual Report

For an explanation of the origins of the Great Financial recession see the 2009 reports’ chapters 1 and 2:


Bank of Spain Annual Report 2009


The world economy has experienced the most serious shock since the Second World War. The ensuing economic policy responses have been on an unprecedented scale. Their reaction has averted a catastrophic spiral and has managed to activate the start of the recovery, although the legacy of the crisis will have far-reaching and multi-faceted repercussions. In Spain, the traumatic impact of this episode has compounded the difficulties stemming from the imbalances that had built up during the previous expansion and from some of the inefficiencies still weighing on the economy. Accordingly, exiting the crisis will be a complex task posing specific challenges. This chapter addresses the main difficulties Spain faces in emerging from the crisis and the economic policy requirements this imposes. The following chapter, which complements this chapter with a more selective theme-based approach, delves into the medium-term problems related to potential growth and supply-side policies. See pdf downloadable below.


Bank of Spain Annual Report 2009


As described in Chapter 1, in the crisis besetting the Spanish economy there has been a combination of external factors and other, domestic factors, linked to the build-up of significant imbalances. These took the form of high private debt, losses in competitiveness and an excessive concentration of resources in the real estate sector, and they were not only due to the factors that drove spending exuberance, but are also related to the persistence of a series of structural obstacles that limit the economy’s growth potential. In turn, the crisis, given its dimension and nature, is exerting effects that go beyond the conjunctural impact on activity and employment and bear down negatively on the level of potential output and its growth in the medium and long term. The rapid application of expansionary monetary and fiscal policies on the demand side to uphold the level of activity has managed to check in the short term the strong recessionary impulses and to circumvent any dangerous feedback loops. See pdf downloadable below.

See also for the first reactions in the EU economic policy a comparative view of the policy response to the crisis:

3 Comparison of the Governmental Actions undertaken in response of the Financial Crisis in Europe paper for discussion in the course of Economics of European Integration

Finally compare with the current results e. g. Last publication of the Bank of Spain. Annual Report

Attached documents

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