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Integration, spurious convergence, and financial fragility: a post-Keynesian interpretation of the Spanish crisis

Summary:
Here is to another crisis like this one! Paper co-authored with Esteban Pérez that was a Levy Institute working paper is published. From the abstract: The Spanish crisis is generally portrayed as resulting from excessive spending by households associated to a housing bubble and/or an excessive welfare spending beyond the economic possibilities of the country. We put forward a different hypothesis. We argue that the Spanish crisis resulted, in the main, from a widening deficit position in the non-financial corporate sector and a declining trend in profitability under a regime of financial liberalization and loose and unregulated lending practices. Full paper available here.

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Integration, spurious convergence,   and financial fragility: a post-Keynesian   interpretation of the Spanish crisis
Here is to another crisis like this one!

Paper co-authored with Esteban Pérez that was a Levy Institute working paper is published. From the abstract:

The Spanish crisis is generally portrayed as resulting from excessive spending
by households associated to a housing bubble and/or an excessive welfare spending beyond
the economic possibilities of the country. We put forward a different hypothesis. We argue
that the Spanish crisis resulted, in the main, from a widening deficit position in the non-
financial corporate sector and a declining trend in profitability under a regime of financial
liberalization and loose and unregulated lending practices.

Full paper available here.

Matias Vernengo
Econ Prof at @BucknellU Co-editor of ROKE & Co-Editor in Chief of the New Palgrave Dictionary of Economics

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