String of defaults: Spanish financial crises through the years

Shachmurove, Tomer and Shachmurove, Yochanan (2011): String of defaults: Spanish financial crises through the years. Published in: Aestimatio. The IEB International Journal of Finance No. 2 (July 2011): pp. 1-20.

Abstract

Like many countries, Spain has gone through a series of financial crises, both before and after its industrialization. There are many underlying causes for these crises, as well as for the current Spanish downturn. It is worth noting that there are similarities between recessions throughout the history of Spain. The role of government spending, government regulation, credit institutions, budget deficits, the political climate, and international trade have been important determinants of the state of the Spanish economy, as they have been in other economies across the globe.

• Item Type: MPRA Paper
• Language: English
• Keywords: Spain, Spanish Economy, Financial Crises, Federal Budget Deficit, Banking Crises, Subprime Mortgage, Spanish Industrial Revolution, Economic History, Political Economy, International Trade, Government Regulation
• Subjects: N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations; E - Macroeconomics and Monetary Economics > E0 - General; F - International Economics > F0 - General; N - Economic History > N2 - Financial Markets and Institutions; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; N - Economic History > N0 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; G - Financial Economics > G0 - General; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles

References

Banco de España (2007). Annual Report 2007. (Madrid). http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesAnuales/InformesAnuales/07/Fic/en/inf2007e.pdf, retrieved February 13, 2011.

Banco de España (2008). Economic bulletin, October 2008. (Madrid). http://www.bde.es/informes/be/ boleco/ 2008/be0810e.pdf, retrieved February 17, 2011.

Bentolila, S., Dolado J. and Jimeno J. (2008). Two-tier employment protection reforms: The Spanish experience, CESifo DICE Report, 6, Winter 2008, pp. 49-56.

Bernanke, B. and James, H. (1990). The gold standard, deflation, and financial crisis in the great depression: An international comparison. NBER WP[3488].

Bordo, M. D. (2003). Market discipline and financial crisis policy: A historical perspective in Market discipline in banking: Theory and evidence, Kaufman, G. pp. 157-82.

Bordo, M. and Jeanne, O. (2002). Boom-busts in asset prices, economic instability, and monetary policy. National Bureau of Economic Research.

Bordo, M., Eichengreen, B. Klingebiel, D. and Martinez Peria, M.S. (2001). Is the crisis problem growing more severe? Economic Policy, 16 (April), pp. 51-82.

Bowen, W. (2006). Spain during World War II, University of Missouri Press, Columbia, Missouri.

Boyd, J., De Nicolò G., and Loukoianova, E.(2009). “Banking crises and crisis dating: Theory and evidence.” International Monetary Fund Working Paper, WP[09/11].

Caprio, G. and Klingebiel, D. (2003). Episodes of systemic and borderline financial crises. Mimeo. Washington, D.C.: World Bank.

Carreras, A. (1984). ‘La Producción Industrial Espaňola, 1842-1981: Construcción de un Índice Annual’, in Revista de Historia Económica, 1, pp. 127-57.

Central Intelligence Agency (2011). The world factbook. https://www.cia.gov/library/publications/ the-world-factbook/geos/sp.html, retrieved March 8, 2011.

Checherita, C. Rother, P. (2010). The impact of high and growing government debt on economic growth: An empirical investigation for the euro area. European Central Bank WP[1237]. http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1237.pdf

Čihák, M. (2007). Central Bank Independence and Financial Stability. Conference Does Central Bank Independence Still Matter? Milan, Italy: Bocconi University.

Crawford, L. (8 June 2006). Boom-time Spain waits for the bubble to burst, Financial Times, Europe (Madrid). http://www.ft.com/cms/s/0/32cd35d0-f68b-11da-b09f-0000779e2340.html? nclick_check=1.

Demirgüç-Kunt, A. and Detragiache, E. (1998). The determinants of banking crises in developing and developed countries. IMF Staff papers, 45. Washington, DC.

European Economic Advisory Group (2011). The EEAG report on the European economy, “Spain,” CESifo, Munich 2011, pp. 127-145.

Eurostat (2011). Harmonised unemployment rate by gender – total. http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1` retrieved on March 9, 2011.

Fontana, J. and Nadal, J. (1976). Spain, 1914-70, in C.M. Cipolla (ed.) The Fontana Economic History of Europe, 6(ii) London, pp. 460-529.

Harrison, J. (1985). The Spanish economy in the twentieth century. New York: St. Martin’s Press.

Harrison, J. (1993). The Spanish economy from the civil war to the European community. Manchester: MacMillan.

Hugh, E. (2008). Spain's mortgage lending and building permits down – seeking alpha. seeking alpha. http://seekingalpha.com /article/87951-spain-s-mortgage-lending-and-building-permits-down

Instituto Nacional de Estadística (INE) at: http://www.ine.es/jaxi/tabla.do?path=/t07/a081/e01/l1/&file=03002.px&type=pcaxis&L=1

Kaminsky, G., and Reinhart, C. (1999). The twin crises: The causes of banking and balance-of-payment problems. American Economic Review, 89(3), pp. 473–500.

Klomp, J. (2010). Causes of banking crises revisited. North American Journal of Economics and Finance, pp. 72-87.

Kulish, N. and Thomas, L. Jr. (28 April 2010). IMF promises more aid for Greece as European crisis grows. The New York Times.

Laeven, L. and Valencia, F. (2008). Systemic banking crises: A new database. IMF[WP224]. Washington, DC.

League of Nations, Statistical Yearbook, 1937-1938, “Mineral and Industrial Production.”

Lieberman, S. (1982). The contemporary Spanish economy. London: George Allen and Unwin.

Lieberman, S. (1995). Growth and crisis in the Spanish economy: 1940 - 1993. London and New York: Routledge.

Prasad, E. and Sorkin, I. (2009). Assessing the G-20 stimulus plans: A deeper look. The Brookings Institution. <http://www.brookings.edu/articles/2009/03_g20_stimulus_prasad.aspx>, retrieved March 8, 2011.

Reinhart, C. and Rogoff, K. (2009a). This time is Different. Princeton: Princeton University Press.

Reinhart, C. M. and Rogoff, K. (2009b). International aspects of financial-market imperfections: The aftermath of financial crises. American Economic Review, 99(2), pp. 466-472.

Reinhart, C. and Rogoff, K. (2008). “Banking crises: An equal opportunity menace.” National Bureau of Economic Research [WP14587].

Reuters (13 February 2009). “Spain's vegara does not expect deflation”, Forbes (Madrid: Forbes), http://www.forbes.com /feeds/afx/2009/02/13/afx6049113.html,retrieved 2 May 2009.

Shachmurove, Y. (2010a). An excursion through two hundred years of financial crises, Quantitative Methods in Economics, (Lead Article) XI(1), pp. 1-23.

Shachmurove, Y. (2010b). Economic Crises: Past, Present and… Future, International Journal of Business, (Lead Article), 15(4), Fall, pp. 363-375.

Soltsen, E. and Meditz, S. Eds. (1988). Spain: A country study. Washington: Government Printing Office (GPO). For the Library of Congress.

Suarez, J. and Ceron, J. (2006). “Hot and cold housing markets: International evidence”. CEPR Discussion Paper No. 5411.

Temin, P. (2008). “RBC views of the Great Depression and recent events: A review of Timothy J. Kehoe and Edward C Prescott’s Great Depressions of the Twentieth Century,” Journal of Economic Literature, 46, pp. 669-84 (September).

Thorvald, E., Solheim, J. and Vale, B. (2004). The Norwegian Banking Crisis, Occasional Paper 33. Oslo: Norges Bank.

Toniolo, G. (1997). The world economy between world wars. USA: Oxford University Press.

United Nations Department of Economic and Social Affairs.(2010). Global outlook 2010. http://www.unctad.org/en/docs/wesp2010_en.pdf, retrieved February 16, 2011.

Vale, M. (2004). Innovation and knowledge driven by a focal corporation: The case of the Autoeuropa supply chain. European Urban and Regional Studies, 11 (2), pp. 124-140.

Yahoo! Finance at: http://au.finance.yahoo.com/q/bc?s=^ESDOWD&t=my&l=on&z=l&q=l&c=