DP7591 Spain's International Position, 1850-1913

Author(s): Leandro Prados de la Escosura
Publication Date: December 2009
Keyword(s): balance of payments, current account reversals, growth, investment, saving, Spain, sudden stops
JEL(s): F21, F32, F43, N13, N73
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7591

Spain's financial position during the late 19th and early 20th century has usually been presented as one of persistent deficit on current account, which resulted from her integration into international commodity and factor markets and this, in turn, slowed down growth. In this essay a preliminary reconstruction of the balance of payments on current account allows us to reject this view. In fact, a net capital inflow made possible to meet the demand for investment boosting economic performance. Current account reversals in a context of macroeconomic domestic imperfections help to explain the economic slowdown at the turn of the century.