Roberto Ramos

Agglomeration Matters for Trade

We use a unique administrative dataset of Spanish exporters to document the existence of exporters’ geographical agglomeration by export destination. We reveal that firms selling to countries with worse business regulations, a dissimilar language and a different currency tend to cluster significantly more. We then assess the implications of exporters’ geographical agglomeration for firms’ behavior and for the estimated welfare gains from trade. On the one hand, we find that exporters engage in more stable trade relationships with those countries that are the export destinations of nearby firms. On the other, we introduce agglomeration in a model of international trade a la Melitz (2003). Using our Spanish firm-level data, we find that, relative to a model without agglomeration, taking this phenomenon into account increases the elasticity of welfare with respect to fixed trade costs by 44%

Growing like Spain: 1995-2007

Spanish GDP grew at an average rate of 3.5% per year during the expansion of 1995-2007, well above the EU average of 2.2%. However, this growth was based on factor accumulation rather than productivity gains as TFP fell at an annual rate of 0.7%. Using firm-level administrative data for all sectors we show that deterioration in the allocative efficiency of productive factors across firms was at the root of the low TFP growth in Spain, while misallocation across sectors played only a minor role. Cross-industry variation reveals that the increase in misallocation was more severe in sectors where government influence is more important for business success, which represents novel evidence on the potential macroeconomic costs of crony capitalism. In contrast, sectoral differences in financial dependence, skill intensity, innovative content, tradability, or capital structures intensity appear to be unrelated to changes in allocative efficiency. All in all, the observed high output growth together with increasing firm-level misallocation in all sectors is consistent with an expansion driven by a demand boom rather than by structural reforms.

The Spanish Public Pension System: Current Situation, Challenges and Reform Alternatives (El Sistema Público De Pensiones En España: Situación Actual, Retos Y Alternativas De Reforma

espanolEl deficit del Sistema de la Seguridad Social espanol alcanzo un 1,5 % del PIB en 2015, que contrasta con el superavit observado antes de la crisis economica, del 2,2 % del PIB en 2007. Este deterioro se debe, sobre todo, a un incremento del gasto en pensiones contributivas (en % del PIB), como resultado del incremento de la tasa de dependencia, el aumento de la tasa de sustitucion de las pensiones y la caida de la tasa de empleo. Mas alla de esta situacion de corto plazo, el sistema publico de pensiones espanol se enfrenta, como los del resto de los paises desarrollados, a retos importantes causados por la expectativa de un aumento signifi cativo de la longevidad y, consecuentemente, de la proporcion de la poblacion en edad de jubilacion. En este contexto, este documento tiene como objetivo contribuir al debate sobre la situacion del sistema de pensiones mediante el analisis de su evolucion reciente, las previsiones hacia el futuro, que incorporan el impacto de las ultimas reformas, y los retos pendientes. EnglishThe Spanish Social Security System’s deficit rose to 1.5% of GDP in 2015, in contrast to a pre-crisis surplus of 2.2% of GDP in 2007. This deterioration is primarily due to an increase in contributory pension spending (as a % of GDP), as a result of the rise in the dependency ratio, the increase in the pension replacement rate and the decline in the employment rate. Beyond this short-term situation, the Spanish public pension system, as is the case in other developed countries, faces major challenges arising from expectations of signifi cant longevity gains and the attendant growth of the retirement-age population. In this context, this paper aims to contribute to the debate on the situation of the pension system through an analysis of its recent evolution, forward-looking projections that include the impact of the latest reforms and the challenges outstanding.

The Output Effects of Tax Changes: Narrative Evidence from Spain

This paper estimates the GDP impact of legislated tax changes in Spain using a newly constructed narrative record for the period 1986-2015. Our baseline estimates suggest that a 1% of GDP increase in exogenous taxes depresses output by around 1.3% after one year, this negative effect fading away at more distant horizons. We also find that the effect of changes in indirect taxes are larger and that, following a tax increase, investment reacts more than consumption. Overall, our set of estimates is consistent with negative output effects triggered by tax increases, yet the quantitative effects are subject to non-negligible uncertainty that is reflected in wide confidence bands, in line with the extant literature for other countries.