Beating fiscal dominance. The case of Spain, 1874-1998
AbstractDespite the theoretical agreement on the inflationary effects of persistent deficits empirical work did not provide supporting evidence until the inclusion of non-developed countries in panel studies. This paper proposes an alternative approach, by exploiting the changes in development in a single country in the very long run, Spain over 1874-1998. As a main result, the use of different econometric tools shows that the causality from fiscal to monetary variables weakens as time goes by. More importantly, as in previous research, the intensity of the link markets, fiscal dominance holding until the easier access to foreign markets that followed its entry into the European Community in 1985.
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Bibliographic InfoPaper provided by Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza in its series Documentos de Trabajo with number dt2008-08.
Date of creation: Aug 2008
Date of revision:
Fiscal dominance; money; financial development;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
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