This paper uses an estimated DSGE model to analyse the factors behind the build-up of imbalances in the Spanish economy. Shock decompositions suggest that external imbalances have been able to build up mainly due to the reduction in real interest rates and easier access to credit following the...

The report analyzes the relation between private consumption and the current account, regarding it as the external savings of economy. The study is carried out through of an inter-temporal current account model, which is derived from the Permanent Income Theory. This approach, according to the...