Publication

This report provides a quantitative assessment of the impact of the Argentine crisis of 1998-2002 on the Spanish economy in terms of its Gross Domestic Product (GDP). The authors identify six channels through which the crisis could have affected the Spanish economy - three "real" economy channels and three financial channels. The three real economy channels are trade, business, and immigration. The financial channels are bond markets, direct cost of default, and the stock-market knock-on effect on financial wealth. After examining these channels, the authors find that the Argentine crisis may have reduced Spanish economic growth by 0.8 per cent over the period 1999-2000.