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The economic effects of fiscal policy: Further evidence for Spain

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  • Sosvilla-Rivero, Simón
  • Rubio-Guerrero, Juan J.

Abstract

Previous research considered the impacts of fiscal policy on economic activity in Spain using Vector autoregression (VAR) models. In this paper, we contribute to the existing literature by making use of autoregressive distributed lag estimation procedures that present significant advantages over the VAR alternative. Our econometric methodology is data-driven, and it allows us to select the statistical model that best approximates the relationship between the variables under study and to assess short- and long-run symmetric and asymmetric effects of fiscal policy on output performance. Using quarterly time-series data for Spain covering the period 1980Q1–2020Q4, we offer quantitative estimates of these effects both for aggregated and disaggregated public expenditures and net revenues. These results would be useful for policymakers in the design of a well-informed macroeconomic and public debt management strategy.

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  • Sosvilla-Rivero, Simón & Rubio-Guerrero, Juan J., 2022. "The economic effects of fiscal policy: Further evidence for Spain," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 305-313.
    • Handle: RePEc:eee:quaeco:v:86:y:2022:i:c:p:305-313
    DOI: 10.1016/j.qref.2022.08.002
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    More about this item

    Keywords

    Fiscal policy; Public expenditure; Tax revenues; ARDL models; NARDL models;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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