External constraints to Spanish economic growth, 1870-1913
Daniel A. Tirado Fabregat, Alfonso Herranz Loncán
Revista de Historia Económica - Journal of Iberian and Latin American Economic History, Año 14, 1, 1996, pp. 11-49
In this paper we estimate long-term functions of Spanish foreign trade from 1870 to 1913. We find the income elasticity of the Spanish import demand to be higher than the income elasticity of the export demand. This implies that, in the absence of compensation mechanisms, the Spanish economy was condemned to balance-of-payments constraints when its growth was similar to its trade partners'. These constraints implied a constant pressure over the peseta's exchange rate. These findings allow us to contribute to some present debates about Spanish economic policy of that period, particularly those dealing with the adoption of the gold standard and foreign trade liberation.