12. Balance of Two Centuries: Growth Engines and Economic Policies

The final chapter looks, first, at the growth engines—the sources of productivity growth—of the Spanish economy in the long term. Special attention is paid to structural change and labour productivity distinguishing amount and quality of work. Second, it addresses the performance of economic policies, focusing on the two balances affecting growth stability: foreign accounts and public accounts. Both may build up major challenges to stability and growth when they become “twin deficits”. Monetary policy has had the responsibility to respond to these challenges mainly managing the exchange rate. Growth and stability are the main argument of the book, and they use to be intertwined. The chapter reviews the impact of both on income distribution, the major issue in collective action. This two centuries overview wraps up weighing the role of institutional change.