A supermultiplier demand-led growth accounting analysis applied to the Spanish economy (1998-2019)

In this paper, we analyse the demand-led determinants of Spanish economic growth from 1998-2019. We apply the supermultiplier demand-led growth accounting methodology by with two modifications: First, we incorporate consumption out of public transfers, following and . Second, we incorporate consumption out of public wages as a source of autonomous demand, theoretically suggested by . Our demand-led growth decomposition highlights: (i) public demand and exports as important stable growth drivers, and a decreasing supermultiplier that reduces growth rates; (ii) the indirect effect of a real estate boom in the economic expansion of 1998-2008 caused by increasing public revenues and opening space to the expansion of public demand; and (iii) the incapacity of exports to lead the recovery alone, as the latter started only with the resumption of the public and private demand.