The Spanish Hangover
Spain faces high unemployment and slow growth. This paper focuses on an important source of those problems, namely its housing market. While some adjustment has occurred since Spain's housing bubble burst in 2008, the authors find that house prices and construction need to decrease more to slow Spain's unsustainable accumulation of foreign debt.
Cinzia Alcidi is LUISS Research Fellow at CEPS, and Daniel Gros is Director of CEPS.