The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850-2000


Table 1. Estimated exports and imports elasticities, 1850-1913 and 1940-2000



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Table 1. Estimated exports and imports elasticities, 1850-1913 and 1940-2000














1850-1913

1.70a

(304.4)


1.93a

(202.1)


1.51a

(16.98)


0.30

(0.60)


1850-1891

2.30a

(139.7)


2.69a

(66.60)


0.41

(1.09)


−0.89 (2.13)

1892-1913

0.73a

(16.20)


1.43a

(34.31)


0.67

(1.52)


−0.35 (0.44)

1940-2000

2.60a

(158.3)


1.79a

(639.9)


0.13

(0.12)


0.32

(3.25)


1951-2000

2.79a

(219.8)


1.85a

(944.6)


−0.65

(1.53)


1.01a

(16.85)


1951-1974

1.73a

(73.54)


1.57a

(1372.1)


−1.87a

(10.61)


−0.07

(0.17)


1975-2000

4.18a

(224.3)


2.47a

(593.8)


−0.35

(1.18)


0.83a

(24.94)


1940-1959

0.71a

(28.44)


1.33a

(110.4)


−0.60a

(66.47)


−0.30a (23.69)

1960-2000

3.65a

(874.3)


2.10a

(1680.9)


0.17

(0.49)


1.34a (73.79)

1960-1974

2.54a

(106.2)


1.75a

(1517.6)


−0.42

(0.64)


0.37b (5.79)

1986-2000

4.59a

(49.76)


3.09a

(223.4)


0.08

(0.01)


0.25 (0.36)


Note: a and b denote significance at the 1% and 5% levels, respectively. The critical values for the Wald tests (distributed as a χ2 with one degree of freedom) are 6.63 and 3.84 (at the 1% and 5% levels).

Source: Own calculations; see the text.



Table 2. Actual and balance of payments-constrained growth rates, 1850-1913 and 1940-2000












1850-1913

1.52

2.00

1.38

1850-1891

1.47

1.83

0.94

1892-1913

1.28

2.29

0.72

1940-2000

4.17

2.99

3.65

1951-2000

4.61

3.30

7.43

1951-1974

6.23

4.45

6.13

1975-2000

3.02

2.25

3.78

1940-1959

3.00

2.73

1.68

1960-2000

4.71

2.97

5.72

1960-1974

7.49

4.23

5.67

1986-2000

3.39

2.19

4.13


Source: col. (1), Prados de la Escosura (2003); col. (2), Carreras and Tafunell (2004, 2005); col. (3), own calculations. See the text.





Table 3. Actual and balance of payments-constrained growth rates, 1870-1913 and 1940-2000. Alternative data for foreign output






Western Europe’s GDP

Weighted average of 6 trading partners’ GDP













1870-1913

1.79

2.09

2.06

1.79

1.47

1.99

1870-1891

1.99

1.75

2.02

1.99

1.23

2.21

1892-1913

1.28

2.41

0.74

1.28

1.69

0.75

1940-2000

4.17

2.76

3.50

4.17

2.04

2.95

1951-2000

4.61

3.18

7.45

4.61

2.83

7.45

1951-1974

6.23

4.30

6.11

6.23

3.82

6.21

1975-2000

3.02

2.20

3.80

3.02

1.96

3.73

1940-1959

3.00

2.30

1.36

3.00

0.97

0.34

1960-2000

4.71

2.82

5.75

4.71

2.39

5.49

1960-1974

7.49

3.97

5.64

7.49

3.19

5.23

1986-2000

3.39

2.12

4.15

3.39

1.43

3.96


Source: col. (1) and (4), Prados de la Escosura (2003); col. (2) and (5), Maddison (2010); col. (3) and (6), own calculations. See the text.





Table 4. Ng-Perron tests for unit roots







1850-1913





expt

impt

cabt

−0.34

−3.46


−8.47b

−0.19

−1.13


−2.00b








1940-2000





expt

impt

cabt

3.36

3.78


−159.8a

2.93

2.80


−8.90a



Note: a and b denote significance at the 1% and 5% levels, respectively. The critical values (taken from Ng and Perron, 2001) are −13.8 and −8.1 (at the 1% and 5% levels) for; and −2.58 and −1.98 (at the 1% and 5% levels) for.

Source: Own calculations; see the text.
Table 5. Estimation of a long-run relationship between exports and imports of goods and services





1850-1913

1940-2000

α
β
trend


4.38a

(8.96)


0.44a

(7.15)


0.12a

(46.43)


−5.08a

(9.59)


1.52a

(69.95)






1.39

(0.54)


0.83a

(33.51)


0.04

(0.42)


0.12

(0.05)


0.94a

(648.4)





R2

W: β=1

0.87

−4.36a

11.43a


0.65

−4.20a

8.28a


0.96

−3.89b

1.33


0.95

−3.97a



2.99


Note: a and b denote significance at the 1% and 5% levels, respectively. The critical values for the Wald tests (distributed as a χ2 with one degree of freedom) are 6.63 and 3.84 (at the 1% and 5% levels). The critical values for (taken from Phillips and Ouliaris, 1990) are −4.30 and −3.74 (at the 1% and 5% levels) for col. 1 and 3; and −3.84 and −3.27 (at the 1% and 5% levels) for col. 2 and 4.

Source: Own calculations; see the text.


1 In a recent paper, Prados de la Escosura, Rosés and Sanz-Villarroya (2011) stress the continuity between the policy stance in the 1950s and 1960s, so that the gradual liberalization operated during the 1950s would appear as a precondition for the implementation of the Stabilization Plan in 1959.

2 In order to save space, we do not show the estimated elasticities from which the balance-of-payments constrained growth rates in Table 3 have been computed. These estimates are available from the author upon request.

3 The correlation coefficients with respect to the series of the EU’s GDP of Carreras and Tafunell are 99.9% for the GDP of 12 Western European countries, in both periods; and 98.5% and 99.4% for the weighted average of the six trading partners’ GDP, in the periods 1870-1913 and 1940-2000, respectively.

4 The concepts of stochastic and deterministic cointegration were introduced by Ogaki and Park (1997).

5 Notice, on the other hand, that the estimate of β in column two, 1.52, is implausibly high because a β greater than one would not be consistent with a current account deficit, since expt would be growing at a faster rate than impt.


6 The role of current account imbalances within a monetary union is discussed at length in Catte (1998); see also L’Hotellerie-Fallois and Peñalosa (2006) for a particular discussion of the Spanish case within EMU.


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