Feb 23, 2010
| Last Updated
RGE's Q1 2010 Outlook notes the following factors undermining Spain’s medium-term performance:
- a lack of intra-EMU competitiveness, as measured by relative unit labor costs;
- a dysfunctional labor market with distinct insider-outsider features;
- low total-factor productivity growth, even during the boom years, which sets the stage for lower potential growth;
- rigid product markets and wage indexation that resulted in persistent inflation differentials which translate into a pro-cyclical real interest rate channel;
- high private-sector debt that translates into[...]
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