Occasional Papers

The Occasional Papers series seeks to disseminate the work carried out by the Banco de España within its sphere of competence that is considered to be of general interest for knowledge of the functioning of the Spanish economy and of its international environment.

The opinions and analyses published in the Occasional Papers are the responsibility of the authors and are not necessarily shared by the Banco de España or the Eurosystem.

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  • 19/12/2011
    1107. Health care expenditure in the OECD countries: efficiency and regulation (575 KB) Pablo Hernández de Cos and Enrique Moral-Benito

    The containment of health care expenditure is one of the major challenges facing public policymakers in the developed countries. This paper provides evidence of significant differences in the cross-country level of efficiency of health care expenditure, meaning that potential cost savings for the countries considered least efficient might be very high. Further, a significant relationship is found between the various health care policies and institutions in the OECD countries and the efficiency levels of health care systems. The findings are, however, highly sensitive to the efficiency-estimation methodology used.

    There is a Spanish version of this edition with the same number.

  • 26/08/2011
    1106. Nueva actualización del modelo trimestral del Banco de España (648 KB) Samuel Hurtado, Elena Fernández, Eva Ortega, Alberto Urtasun.

    The quarterly model of the Banco de España (MTBE) is a primary tool in the elaboration of medium term projections for the Spanish economy and for the quantification of the effects of different economic policy measures or economic shocks of a very diverse nature.
    As part of the process of continuous development of this tool, a substantial revamping of the model has been recently carried out. Changes have been introduced both in the estimation of the coefficients - with an updated sample period that now extends to the end of 2008 - and in the methodology, affecting all aspects of the model. In addition, new explicative variables have been introduced in order to approximate the effects of agents' confidence and credit restrictions on spending decisions, which allow for a more fitting analysis of the recent evolution of the Spanish economy.

  • 12/08/2011
    1105. Central banks and macroprudential policy. Some reflections from the Spanish experience. (662 KB) Enrique Alberola. Carlos Trucharte. Juan Luis Vega.

    The view that central banks must play a greater role in preserving financial stability has gained considerable ground in the aftermath of the crisis and macroprudential policy has become a central pillar to deal with financial stability. The policy frame of macroprudential policy, its toolbox and interactions with other policies is not completely established yet,  though. In this context, Spain’s ten-year experience with its dynamic provision is a key reference. The analysis shows that, during the current financial crisis, dynamic provisions have proved useful to mitigate —to a limited extent— the build-up of risks and, above all, to provide substantial loss absorbency capacity to the financial institutions, suggesting that it could be an important tool for other banking systems. However, it is not the macroprudential panacea: it needs to be complemented and be consistent with the rest of policies,
    either within the macro-prudential or in the broader context of macroeconomic management, including monetary policy. While there is a higher awareness of the contribution of monetary  policy to financial stability, its role is in practice limited. The case of the euro area is particularly telling in this respect: macro-financial imbalances developed in sectors where financial integration was low and the effects hence were confined to the domestic   economies. The asymmetry between a supranational monetary policy plus macroprudential surveillance and domestic implementation of macroprudential policies raises a set of issues which are worth exploring.

  • 08/08/2011
    1104. An estimate of the potential growth of the Spanish economy (559 KB) Pablo Hernández de Cos. Mario Izquierdo. Alberto Urtasun.

    This paper seeks to estimate the potential output of the Spanish economy, using the
    production function methodology standard in the literature. According to these estimates,
    the growth of the potential output of the Spanish economy stood at around 3% in the
    period 2000-2007, owing to the marked increase in the population and in the participation
    rate and the fall in structural unemployment, as well as vigorous capital accumulation.
    The contribution of these factors to potential output was reduced by the negative
    evolution of total factor productivity. In addition, the economic crisis is estimated to have
    had a significant negative impact on potential output, which has primarily taken the form of
    a large increase in structural unemployment, a sharp slowdown in population growth, as a
    consequence of the loss of momentum in immigrant inflows, and a reduction in the
    contribution of the capital stock resulting from the impact of the crisis on investment.
    As a result, the potential growth of the Spanish economy stands at around 1% during
    the crisis years and in the years immediately thereafter, insofar as some of these negative
    effects take place with a certain time lag. Lastly, in the medium term, the potential output
    of the economy is estimated to recover progressively, once the effects of the crisis have
    disappeared, reaching growth rates about 2%, against a background of negative rates
    of change in the population of age 16-64, a smooth improvement in the NAIRU, a slight
    recovery in investment and a higher contribution from TFP. The application of a strong
    process of structural reforms could, however, significantly improve the growth prospects
    of our economy.

  • 18/07/2011
    1103. The Spanish Survey of Household Finances (EFF): description and methods of the 2008 wave (554 KB) Olympia Bover

    This paper describes the methods of the third wave of the Spanish Survey of Household Finances (EFF2008), paying special attention to the innovations relative to the previous waves. The EFF2008 was designed to give continuity to the information on household finances collected through the EFF2002 and the EFF2005. A desirable characteristic present in all three waves is the oversampling of wealthy households. This is achieved on the basis of the wealth tax through a blind system of collaboration between the National Statistics Institute and the Tax Office which preserves stringent tax confidentiality. An additional important characteristic of the EFF is that the second and third waves have a full panel component. Further, a refreshment sample by wealth stratum has been incorporated in those two waves to preserve cross-sectional representativity and overall sample size. The EFF is the only statistical source in Spain that allows the linking of incomes, assets, debts, and consumption at the household level. The usefulness of the information contained in a survey such as the EFF has led to the decision from the European system of central banks to conduct a household wealth survey in all euro area countries following a methodology similar to the EFF. Therefore, the EFF2008 will allow harmonized comparisons with the new European wealth surveys.

  • 12/05/2011
    1102. Central banking in Latin America: changes, achievements, challenges (631 KB) Klaus Schmidt-Hebbel

    Latin America’s central banks were strengthened in the 1990s by independence laws, adoption of new policy regimes (foremost inflation targeting), and more transparent policy decisions bound by ex-ante rules and ex-post accountability. Central bank modernization - supported by significant fiscal adjustment and financial-sector strengthening - led most Latin American countries to converge to one-digit inflation rates and contributed to higher and more stable growth than in the past. Yet the region’s new policy framework was put to severe testing by the global financial crisis and recession. Quick and innovative policy responses by the region’s central banks helped domestic financial systems and the real economy to resist well the massive financial and real consequences of the banking crisis and recession in industrial countries. Empirical evidence reported here shows that the central banks’ new policy framework and policy response during the crisis dampened significantly the amplitude of the recession. Having weathered well the global financial crisis and recession, now Latin America’s central banks face a large array of policy challenges, which are reviewed in this lecture. Some are common to central banks in industrial and emerging economies, derived from the crisis itself and the issues it poses for improving the role of central banks in attaining more effectively both monetary and financial stability. Other challenges are idiosyncratic to emerging economies in the region (and elsewhere) that are facing renewed growth, high commodity prices, large capital inflows, and real exchange-rate appreciation.

  • 28/03/2011
    1101. El creciente peso de las economías emergentes en la economía y gobernanza mundiales. Los países BRIC (1 MB) Luis Orgaz, Luis Molina, Carmen Carrasco

    This paper examines the growing relevance of emerging and developing economies for the global economy, paying special attention to the BRIC (Brazil, Russia, India and China). The paper also reviews the participation of these countries in some key multilateral institutions for global governance, and compares it to its actual economic weight. An enhanced role in the decision making process of these multilateral institutions is indeed one of the primary objectives of the BRIC group. Finally we elaborate on some other global questions in which these countries also have common interests -like international reserves accumulation, international trade and climate change negotiations- and in which their increased participation has to go hand in hand with a greater consideration of collective interests.

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