How Long is the Long Run? A Dynamic Analysis of the Spanish Business Cycle

31 Pages Posted: 15 Feb 2006

See all articles by Humberto Lopez

Humberto Lopez

World Bank - Research Department

S. Fabrizio

International Monetary Fund (IMF)

Angel J. Ubide

Tudor Investment Corporation

Date Written: June 1997

Abstract

This paper studies the sources of Spanish business cycles. It assumes that Spanish output is affected by two types of shocks. The first one has permanent long-run effects on output and it is identified as a supply shock. The second one has only transitory effects on output and it is identified as a demand shock. Spain seems to have long business cycles, of about 15 years. As restrictive demand policies to control the inflation rate could prove painful and disappointing, supply side policies aimed at reducing rigidities in the product and labor market would be a better way to achieve the same objective.

Keywords: Shocks, Business Cycles, Sacrifice Ratio

JEL Classification: E12, E13, E24, C32

Suggested Citation

Lopez, Humberto and Fabrizio, Stefania and Ubide-Querol, Angel J., How Long is the Long Run? A Dynamic Analysis of the Spanish Business Cycle (June 1997). IMF Working Paper, Vol. , pp. 1-31, 1997. Available at SSRN: https://ssrn.com/abstract=882355

Humberto Lopez (Contact Author)

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Stefania Fabrizio

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Angel J. Ubide-Querol

Tudor Investment Corporation ( email )

800 Connecticut Avenue, Suite 810
Washington, DC 20006
United States
1-202-833 4100 (Phone)
1-202-833 4104 (Fax)

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