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The macroeconomic effects of fiscal policy in Spain

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  • Francisco de Castro

    () (Banco de España)

Abstract

This paper focuses on the effects of fiscal policy in Spain analysed in a VAR context. Fiscal shocks are found to have small, though significant, effects on GDP, private consumption, private investment, interest rates and prices. The pattern of responses and the multipliers obtained seem to accord with some recent pieces of empirical evidence in several cases, while observing some counterintuitive responses in others. Shocks to different readings of spending or taxes yield divergent profiles of responses. When the sample is restricted to the 1990s a different pattern of responses to fiscal shocks is observed, with GDP and interest rate responses being non-significant.

Suggested Citation

  • Francisco de Castro, 2003. "The macroeconomic effects of fiscal policy in Spain," Working Papers 0311, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:0311
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    References listed on IDEAS

    as
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    6. Ardagna, Silvia & Alesina, Alberto, 1998. "Tales of Fiscal Adjustment," Scholarly Articles 2579822, Harvard University Department of Economics.
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    12. Christiano, Lawrence J. & Eichenbaum, Martin & Evans, Charles L., 1999. "Monetary policy shocks: What have we learned and to what end?," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 2, pages 65-148 Elsevier.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    VAR; Identification; Fiscal Shocks;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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