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Spanish Public Debt Sustainability Analysis


  • Carlos Cuerpo

    () (Autoridad Independiente de Responsabilidad Fiscal)

  • José Miguel Ramos

    () (Ministerio de Economía y Competitividad)


This note develops an overarching debt sustainability analysis (DSA) framework, encompassing three of its main dimensions: (i) a traditional (deterministic) sustainability exercise, based on a simple accounting application involving the debt accumulation equation; (ii) an assessment of the realism of the assumptions underlying the deterministic debt projections; and (iii) a stochastic exercise aimed at understanding the uncertainty associated with the deterministic path. This framework is applied to the Spanish case, constructing and dissecting the baseline debt path associated with the official macro and fiscal projections. While Spanish public debt appears largely sustainable along this baseline, its realization seems optimistic in the light of historical experience.

Suggested Citation

  • Carlos Cuerpo & José Miguel Ramos, 2015. "Spanish Public Debt Sustainability Analysis," Hacienda Pública Española / Review of Public Economics, IEF, vol. 215(4), pages 95-118, December.
  • Handle: RePEc:hpe:journl:y:2015:v:215:i:4:p:95-118

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    References listed on IDEAS

    1. Kenneth Arrow & Partha Dasgupta & Lawrence Goulder & Gretchen Daily & Paul Ehrlich & Geoffrey Heal & Simon Levin & Karl-Göran Mäler & Stephen Schneider & David Starrett & Brian Walker, 2004. "Are We Consuming Too Much?," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 147-172, Summer.
    2. António Afonso, 2005. "Fiscal Sustainability: The Unpleasant European Case," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(1), pages 19-44, March.
    3. Silvana Bartoletto & Bruno Chiarini & Elisabetta Marzano, 2013. "Is the Italian public debt really unsustainable? An historical comparison, 1861-2010," Working Papers 13022, Economic History Society.
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    Cited by:

    1. Kosta Josifidis & Radmila Dragutinovíc Mitrovíc & Olgica Glavaski & Novica Supíc, 2018. "Public Policies Influence on Fiscal Deficit in the EU-28: Common Correlated Effects Approach," Hacienda Pública Española / Review of Public Economics, IEF, vol. 227(4), pages 63-101, December.
    2. Checherita-Westphal, Cristina & Žďárek, Václav, 2017. "Fiscal reaction function and fiscal fatigue: evidence for the euro area," Working Paper Series 2036, European Central Bank.

    More about this item


    Public debt sustainability analysis; general government sector; fiscal reaction function; bootstrapping; vector autoregressive models;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt


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