The Microeconomic Origins of the Spanish Boom

28 Pages Posted: 14 May 2018

See all articles by Enrique Moral-Benito

Enrique Moral-Benito

Banco de España; Universidad Carlos III de Madrid

Date Written: May 11, 2018


The Spanish growth experience over the 1995-2007 period was characterized by the remarkable surge in employment and investment as well as the dismal evolution of productivity. These macroeconomic fluctuations were coupled with an unprecedented credit boom fueled by a housing bubble. This article reviews a line of research that investigates the connection between these developments using micro-level data on Spanish firms and banks. The evidence suggests that the abundant availability of credit, partially induced by the real estate bubble, and its propagation through the Spanish production network explain a sizable part of the massive accumulation of labor and capital. Also, the deterioration in the allocation of resources across firms is the main responsible of the fall in aggregate productivity. The allocation of credit across firms and municipalities, the softening of banks lending standards, and the low productivity of Spanish firms can partly explain this deterioration.

Keywords: Spain, firm level data, TFP, misallocation, input-output linkages

JEL Classification: D24, O11, O47, E44, G21, L25

Suggested Citation

Moral-Benito, Enrique, The Microeconomic Origins of the Spanish Boom (May 11, 2018). Banco de Espana Occasional Paper No. 1805. Available at SSRN: or

Enrique Moral-Benito (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903

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