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Macroeconomic Effects of Catalan Fiscal Deficit with the Spanish State (2002-2010) (?)

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  • Jordi Pons
  • Ramon Tremosa-i-Balcells

Abstract

Catalonia yearly contributes to the Spanish State solidarity interterritorial redistribution funds: in 2001 a 8’9% of Catalan GDP, considering the difference between what the Spanish State collect in taxes and what it expends and invests in Catalonia. Because of these yearly fiscal deficit with Spain, Catalonia is loosing its capacity to grow faster and the opportunity to converge more quickly with the EU core regions. In this paper, using a VAR model it is simulated which could be the Catalan GDP growth in the period 2002-2010, if there were a reduction of the yearly Catalan contribution to the Spanish State: the results obtained show that Catalan GDP would easily reach at 2010 the GDP per capita level of the most developed EU regions.

Suggested Citation

  • Jordi Pons & Ramon Tremosa-i-Balcells, 2003. "Macroeconomic Effects of Catalan Fiscal Deficit with the Spanish State (2002-2010) (?)," ERSA conference papers ersa03p128, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa03p128
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    References listed on IDEAS

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    1. William D. Nordhaus, 2002. "The Economic Consequences of a War with Iraq," Cowles Foundation Discussion Papers 1387, Cowles Foundation for Research in Economics, Yale University.
    2. Joan Costa-i-Font & Ramon Tremosa-i-Balcells, 2003. "Spanish Regions and the Macroeconomic Benefits of the European Monetary Union," Regional Studies, Taylor & Francis Journals, vol. 37(3), pages 217-226.
    3. Stefan Mittnik & Thorsten Neumann, 2001. "Dynamic effects of public investment: Vector autoregressive evidence from six industrialized countries," Empirical Economics, Springer, vol. 26(2), pages 429-446.
    4. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1329-1368.
    5. Alberto Abadie & Javier Gardeazabal, 2001. "The Economic Costs of Conflict: A Case-Control Study for the Basque Country," NBER Working Papers 8478, National Bureau of Economic Research, Inc.
    6. William D. Nordhaus, 2002. "The Economic Consequences of a War in Iraq," NBER Working Papers 9361, National Bureau of Economic Research, Inc.
    7. Ramon Tremosa-Balcells & Jordi Pons-Novell, 2001. "Measuring monetary policy shocks in the European Monetary Union," Applied Economics Letters, Taylor & Francis Journals, vol. 8(5), pages 299-303.
    8. Joan Costa-i-Font & Ramon Tremosa-i-Balcells, "undated". "Spanish Regions and the Macroeconomic Benefits of European Monetary Union (EMU)," Studies on the Spanish Economy 89, FEDEA.
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    Cited by:

    1. Costa-i-Font, Joan, 2010. "Unveiling vertical state downscaling: identity and/or the economy?," LSE Research Online Documents on Economics 27750, London School of Economics and Political Science, LSE Library.
    2. Joan Costa-i-Font, 2010. "Unveiling Vertical State Downscaling: Identity and/or the Economy?," LEQS – LSE 'Europe in Question' Discussion Paper Series 20, European Institute, LSE.
    3. Andrés Rodríguez‐Pose & Daniel Hardy, 2021. "Reversal of economic fortunes: Institutions and the changing ascendancy of Barcelona and Madrid as economic hubs," Growth and Change, Wiley Blackwell, vol. 52(1), pages 48-70, March.

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