Social Action Now!

An objective view to worldwide social issues

ECONOMY SITUATION ( Spain and Basque Country)

After searching information in the references I have cited for this work, I have known the real situation that is suffering  Spain and the Basque country in the economy:

The economy situation in Spain and Basque Country, is realy bad, lot of people are unemployment, by the staff cuts. In many companies, the directors are not able to charge to workers because the crisis. Also, the salary of those who are still having a job is less. So, people buy less products than they did before the crisis, now they look to the price before buying something and they buy the cheaper one. We can listen everywhere talking about economic, because of the situation we are suffering.I hope you will learn more about the economic situation after reading my blog and reading the reference I have writte down.


Economy as a social science:

Economic is the social science that studies  the processes of production, distribution and consumption of propeties and services. The object of the study economic  as a social science is the functioning of the economic system.Economics as a social phenomenon, is a unit, but can be analyzed from various perspectives. Often this prespectives are divide on “microeconomics” and “macroeconomics”.Within the economy, you can find various disciplines or fields of study, which each one can be use  microeconomics and macroeconomics.Algunas ramas de estudio importantes son la economía internacional, las finanzas públicas, la economía del crecimiento, la organización industrial, la economía laboral, la economía del welfare, etc.

Economy as a economic system:

An economic system is the set of individuals, institutions and companies, state, etc. .., the natural resources within the geographic boundaries of the economy, existing infrastructure, and the relationships between these elements,  that determine the production and distribution of propeties and services.The social system is composed of various subsystems (political, cultural, economic), each of these subsystems can be isolated from the rest only by a process of abstraction.The different approaches of the social sciences analyze the same reality from different viewpoints.Generally, to mention an economy as a system refers to the geographical concept, for example, the global economy, the European economy, the U.S. economy, the economy of a province or state, etc. ..

Etymology of the word economy:

The etymological origin of the word economy is oikonomos the Greek word, which means managing the household: oikos meaning “home” and nemein, “administration”.

* evolution of the economy ( crisis) the crisis that we are suffering had a evolution , so why is the situation so terrible? (….)


The Spanish economy has experienced strong economic growth in real terms, particularly intense in the 60s.

The cumulative real growth rate in the period 1960 – 2000 has been about 3.3%, well above the European average growth.As an indicator we have used the evolution of real GDP (nominal GDP – price impact).

The Spanish economy grows much because we started with lower development levels than the European average and strong investor process (financial capital formation).

The consequences are an increase in the level of capital equipment that allow the increase in the technological level of the production process.

Causes :

Two economic theories:

A) Convergence theory (neoclassical):

Companies tend to converge in the long term as a natural consequence of market logic.The logic leads to less capitalized companies invest in (development) therefore should have a higher level of growth (cheaper land, lower salary …)This theory says that these circumstances favor the long run companies in a single market tend to equalize.

B) Endogenous Growth Theory (theory of cumulative causation growth)

Companies grow with the accumulated stock of technology, human capital and infrastructure.More developed companies have higher initial endowment of these growth regulatory variables and therefore tend to grow faster than the less developed regions.Economic growth in this period was not constant but it was oscillating, cyclic periods of growth and even decline or stagnation. Growth rate in 2000: 4%.


1) 1960 – mid-70s, to the crisis. Stronger growth and greater convergence

2) 1975-1984. Stagnation and divergence

3) 1985-2000. Strong oscillations.


Situation of spain :

Spanish economic growth accelerated above the average of industrialized countries.This growth was achieved with strong increases in labor productivity  but the level of employment has not increased.

Spain is an extreme example but close to what happened in EU and Japan. This model differs mainly because growing USA creates jobs.Spanish growth is much higher in the first period.

In the second period is not so much to increase productivity, but it contributes importantly job creation.

In Spain the increase in employment is that there are many or few assets or who has that few busy.

In the labor market in Spain has been less active level.In 1960 women were inactive (housewives), in 2000 50% of women are active. It is a cultural change.Europe had changed.

Today the female participation rate is below the average.Spanish  activity rate is “50%, the lowest in Europe.


It is a consequence of two factors:

  1.  Increase in the capitalization of the production process more physical capital, more capital goods …
  2. Improved technical progress, the result of innovation (organizational forms …)

More information :


Population: high densiedad demographic and less growth of population since 1995.The Basque country, has exceeded the European average in spending, GDP, innovation, braking  the average territory historico of “Guipuzkoa” with the 2.58% in 2010.

Thanks to the impulse of Basque society, its institutions and public organisms and private country Basque will be the innovative leader in Europe by 2020 thanks to the actions promoted by the Fundación Innobasque.

The Basque country concentrates a large number of industries is one of the regions most rich European.the unemployment rate according to the survey of the workforce in the second quarter of 2010 was 10.40%.

Regarding the impact of ETA economy of this autonomous community currently a product obtained a gross of the order of 8% but reduced to gross domestic product than what would have been if the violence has not had Cystic in Basque society.

  • DIFFERENCES : ( between spain and basque country)
  1. Public sector: reduced debt in the Basque country.
  2. Population : high demographic density and a lower population growth since 1995 in the Basque country than in the Spanish average.
  3. Real growth: growth lower  in the basque country than in Spanish average between 2000 and 2005
  4. The labour market: less rate of unemployment in the Basque country that in the Spanish average with a strong decrease of the same since 1995
  5. Prices and salarys: higher prices and the purchasing power of wages growth compared to the Spanish average ( in the basque country)
  6. Foreign sector: high degree of internationalization in relation to foreign trade
  7. Business: high development of the business fabric, characterized by a larger half of the companies.
  8. Innovation and new technologies: remarkable effort in R & D higher that the average Spanish in the Basque country, promoted mainly by the local business network.

Conclusion: After reading information about the economy of Spain and Basque Country , I can understand better the terrible situation we are suffering. the crisis has economic causes but also psychological, social, political, and ethical.We must have in mind that the economy is part of the environment and has a very important influence on people’s lives.

economy has influences in  behaviors, emotions and expectations of citizens, as we influence in it, from the perception and interpretation.This crisis, called by many as the crisis in developed countries, is rooted in the artificial expansion of credit in U.S.

A crisis in any place of the planet have immediate influence on the economy of any country, affecting the financial side and also the real economy of all the individuals that comprise it.

the  crisis has created some distrust in the banks to lend money, because they do not know what their real solvency is, and they are afraid.

reference: ( here are some webside that I have use to do my blog ) Europa Press | Bilbao Actualizado martes 09/10/2012 14:05 horas primer semestre 2012  Análisis Económico 16febrero 07 Notas de Economía Regional


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