IDEAS home Printed from https://ideas.repec.org/p/fda/fdaeee/19.html
   My bibliography  Save this paper

Reducing Spanish unemployment under the EMU

Author

Listed:
  • Olivier Blanchard
  • J. F. Jimeno

Abstract

Spain enter the EMU with an unemployment rate roughly ten percentage Points higher than the Euro average - 19% versus 9%. Can it reasonably hope to eliminate this differential and join its Euro partners in further lowering unemployment? If so, how long will it take? And what will it take? The Spanish economy has grown at close to 3% per year, and the unemployment rate has fallen by 4 points, from 23% in 1995 to 19% in 1998. This has given hope to those who think that unemployment can indeed be lowered at a steady pace. However, Spain has just gone on the Euro. Spain will now have the same interest rate as its Euro-partners. And the margin of maneuver on the other macroeconomic instrument, fiscal policy, will reamin very limited. Spain will have to decrease its unemployment rate, with one of its two hand to decrease its unemployment rate, with one of its two hands tied behind its back. This seems a tough challenge. First, Spain has to grow much faster than its Euro-partners. Second, this growth has to meet some conditions. Banced growth requires a change in the composition of demand, a lower share of consumption and government expenditures and a higher share of investment. Moreover, Spain will have to achieve a lower inflation rate than its partners, perhaps even deflation. The least it can be said is that it may not be easy. There lies the challenge facing Spain under EMU.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Olivier Blanchard & J. F. Jimeno, "undated". "Reducing Spanish unemployment under the EMU," Studies on the Spanish Economy 19, FEDEA.
    • Handle: RePEc:fda:fdaeee:19
    as

    Download full text from publisher

    File URL: https://documentos.fedea.net/pubs/eee/eee19.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samuel Bentolila & Juan F. Jimeno, "undated". "Spanish Unemployment: The End of the Wild Ride?," Working Papers 2003-10, FEDEA.
    2. Juncal Cunnado & Fernando PErez De Gracia, 2003. "Sacrifice Ratios: Some lessons from EMU countries, 1960-2001," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(3), pages 327-337.
    3. Gilles Saint Paul & Samuel Bentolila, 2000. "Will EMU increase eurosclerosis?," Economics Working Papers 449, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Julen Esteban-Pretel & Elisa Faraglia, 2005. "Monetary Shocks in a Model with Loss of Skills," CIRJE F-Series CIRJE-F-380, CIRJE, Faculty of Economics, University of Tokyo.
    5. Gómez García, F. & Rebollo Sanz, Y. & Usabiaga Ibáñez, C., 2002. "Nuevas estimaciones de la NAIRU de la economía española: métodos directos," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 20, pages 509-530, Diciembre.
    6. Dionisio Ramirez & Gabriel Rodr¨ªguez, 2014. "Do Labor Reforms in Spain Have an Effect on the Equilibrium Unemployment Rate?," International Journal of Social Science Studies, Redfame publishing, vol. 2(1), pages 105-120, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fda:fdaeee:19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Carmen Arias (email available below). General contact details of provider: https://www.fedea.net .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.