Case | HBS Case Collection | January 2009 (Revised March 2012)

Spain: Can the House Resist the Storm?

by Diego A. Comin


On September 16, 2008, President Rodriguez Zapatero recognized the severity of Spain's macroeconomic situation and clearly pointed to the culprit in front of the Spanish Congress: "Let nobody doubt it; there is already a wide consensus about the origin of the crisis: [It is] in the U.S. and its subprime mortgages." During the last eight years, Spain had gone through a phenomenal expansion that has had many important ingredients: immigration, housing boom, banking and financial market regulation, current account deficit, and productivity growth. This case analyzes how they interacted during the period 2000-2007 and what drove the Spanish recession in 2008.

Keywords: Business Cycles; Economy; Financial Crisis; Macroeconomics; System Shocks; Spain;


Comin, Diego A. "Spain: Can the House Resist the Storm?" Harvard Business School Case 709-021, January 2009. (Revised March 2012.)