ABSTRACT
This chapter takes a closer look to the evolution of unemployment and inflation in Spain during the second half of the 1990s, to show the increases in structural unemployment during the 1980–1995 period and to assess the extent to which reductions in Spanish unemployment are structural or cyclical in nature. It describes the evolution of labor market reforms in Spain since the mid-1970s. Fluctuations in unemployment can reflect both cyclical and structural factors. Inflationary pressures are often indicative of which of the two factors are more relevant. The chapter shows the evolution of the inflation rate over the last quarter of the 20th century. Spain went through a gradual disinflation since the mid-1970s, as did the rest of the EU, but from higher levels. The chapter concludes with some comments that may be of some interest for the design of labor market policies in CEECs in light of the Spanish experience.
