Effects on labour and GDP of the cap 2013 reform though investment in agricultural machinery

Abstract

This paper studies the effect of the investment in agricultural machinery on the Spanish net employment and GDP growth. Those dynamic responses to a permanent unitary shock in agricultural machinery capital stock are studied estimating a reduced form of a Structural Equation Model (SEM) where effects on all variables are considered. Results suggest that CAP 2013 negotiation in Brussels is crucial for the Spanish 25% unemployment rate. The investment of 4,5 thousand Euro increases net employment in one employee after 4 years, while other machinery requires 24,7 thousand Euro and metal machinery 47,2 thousand Euro for the same achievement.