Integration, Spurious Convergence, and Financial Fragility: A post-Keynesian interpretation of the Spanish crisis Esteban Perez Caldentey and Matias Vernengo

[Working Paper No. 02/2015]

The authors argue that the Spanish crisis resulted from a widening deficit in the non-financial corporate sector and a declining trend in profitability under a regime of financial liberalization and loose and unregulated lending practices.

WP_02_2015 (Download the full text in PDF format)