According to one possible interpretation, this trend is a reflection of two consecutive shocks: from 2000 to 2004, a temporary "demand" shock, mainly reflecting portfolio shifts; and, since 2004, a "supply" shock i.e. an increase in liquid assets triggered by the fall in the opportunity cost of holding money in a context of historically low interest rates. But the fact that this situation has now lasted since 2001 may suggest another explanation: that the apparent break in trend velocity that took place at that time is of a structural nature. On-going econometric research carried out at the Banque de France confirms this intuition. The sharp decrease in interest rates, of course has played a role. Nevertheless, econometrics seems to show that this only accounts for a very small part in the break in the trend visible since 2001. So we might be facing a permanent increase in the demand for money. Consistent with this hypothesis is the fact that money holdings by corporates and financial institutions have grown much faster, in recent years, than those of households. Money and credit growth could then be related to a common cause: financial development and the increasing weight of financial assets in our economies. A lot of work, however, remains to be done to fully understand the changes we are facing. This, in my view, is the beauty of our monetary analysis. It invites us - indeed it forces us – to face the complexity of our world and the ever changing nature of our environment and our behaviour.
Before the pandemic broke, Banco de España estimates had placed the Spanish economy’s growth potential slightly above 1% per annum. It is too soon to accurately assess the scale of the damage the current crisis will cause to this potential growth. But, unquestionably, the impact will be negative and, therefore, our growth capacity looking ahead might be lower than that estimated before the crisis. The main factor behind the Spanish economy’s modest potential growth is, undoubtedly, the low structural growth of total factor productivity. These differences should not be underestimated, since productivity gains are a fundamental ingredient for achieving a 9  sustainable increase in a country’s economic well-being. Indeed, the greater these gains are, the greater the possibilities of raising wage levels and the quality of the jobs created, along with increasing the resources for funding public policies. It is thus necessary to address the various structural aspects which, across the board, restrict productivity gains. In this connection, we must improve the quantity and quality of public and private investment in human and technological capital, revise our educational model and promote business growth and dynamism. Elsewhere, labour market duality, a very high structural unemployment rate and high longterm unemployment not only restrict our growth capacity but also contribute to increasing inequality. In fact, since 1980 the unemployment rate in Spain has averaged almost 17%, a figure far higher than that observed in other European countries.