Imbalances and rebalancing in an estimated structural model for Spain
This paper uses an estimated DSGE model to analyse the factors behind the build‐up of imbalances in the
Spanish economy. Shock decompositions suggest that external imbalances have been able to build up mainly
due to the reduction in real interest rates and easier access to credit following the elimination of the exchange
rate risk premium. A rebalancing process in recent years with a sharp contraction in domestic demand has
moved the trade balance back into surplus. The main driving factors were the collapse of the housing bubble
and tightening of credit conditions.
INT VELD Jan;
PAGANO Andrea;
RACIBORSKI Rafal;
RATTO Marco;
ROEGER Werner;
2015-02-26
ASSOC INTERNATIONAL JOURNAL CENTRAL BANKING
JRC89830
1815-4654,
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