The contradictory path of the capital accumulation process in Spain under the Euro

Book, Preprint OPEN
Mateo Tomé, Juan Pablo (2015)
  • Publisher: Faculty of Arts and Social Sciences, Kingston University
  • Subject: economics | capital accumulation; growth; productivity; investment
    • jel: jel:E11 | jel:E22 | jel:O40 | jel:O33

The object of study is the dynamic of capital accumulation in Spain between 1999 and 2012, a period in which the Spanish economy has had first a system of fixed exchange rates, and then monetary integration within the Eurozone. Investment has been largely driven by the revaluation of assets related to construction (mainly residential), which has generated a profound reshaping of the economic structure. The relationship between investment, productivity and costs is first approached from a macroeconomic perspective, followed with an analysis of the composition by assets and sectors. It is shown that the most dynamic sectors have been those with relative low technical composition of capital, leading to absolute declines in labour productivity, as well as a price-effect that has completely distorted the reproduction of the Spanish economy.
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    4 Although it is an imperfect indicator, note that the GDP per employed in Spain was, in 1999, 75% of the average of the euro area-12, and between 67 and 72% in relation to Germany, France, Austria and Finland (Ameco, 2015). The gap would be even greater if output per hour of work is taken (Mas et al, 2013). According to BoS (2009), Spain has 18 percentage points below the Eurozone average K/L ratio, which is also corroborated by Murillo (2010).

    5 More than 5% of GDP from March 2004 and up to 10% through 2007-08 for the current balance, and a private debt growing from 96 to 210% of GDP between 1999 and 2009-10 (BoS, 2015a). 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Notes. dPK/WL: PkW Source: INE (2014a) and FBBVA (2014)

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