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The dynamics of Spanish public debt and sustainable paths for fiscal consolidation

Author

Listed:
  • Esposito, Piero
  • Paradiso, Antonio
  • Rao, B. Bhaskara

Abstract

This paper analyses possible patterns for the Spain debt-to-GDP ratio with a small macroeconomic model. The role of international macroeconomic variables (such as the US and French GDP growth rates, prices of raw materials, ECB monetary policy stance) and domestic policy instruments is analyzed in the debt dynamics. We find that external conditions, together with policies aimed to stimulate the growth and fulfilling Maastricht restrictions on deficit, play a fundamental role for fiscal consolidation in Spain and help to reach a sustainable pattern.

Suggested Citation

  • Esposito, Piero & Paradiso, Antonio & Rao, B. Bhaskara, 2011. "The dynamics of Spanish public debt and sustainable paths for fiscal consolidation," MPRA Paper 32563, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32563
    as

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    File URL: https://mpra.ub.uni-muenchen.de/32563/1/MPRA_paper_32563.pdf
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    References listed on IDEAS

    as
    1. Paolo Casadio & Antonio Paradiso & B. Bhaskara Rao, 2012. "The dynamics of Italian public debt: alternative paths for fiscal consolidation," Applied Economics Letters, Taylor & Francis Journals, vol. 19(7), pages 635-639, May.
    2. Oliver Röhn, 2010. "New Evidence on the Private Saving Offset and Ricardian Equivalence," OECD Economics Department Working Papers 762, OECD Publishing.
    3. Carlo A. Favero & Massimiliano Marcellino, 2005. "Modelling and Forecasting Fiscal Variables for the Euro Area," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(s1), pages 755-783, December.
    4. Mr. Roel M. W. J. Beetsma & Mr. Xavier Debrun, 2005. "Implementing the Stability and Growth Pact: Enforcement and Procedural Flexibility," IMF Working Papers 2005/059, International Monetary Fund.
    5. Carlo A. Favero, "undated". "How do European monetary and fiscal authorities behave?," Working Papers 214, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Debt to GDP Ratio; Spain Economy; International Factors; SUR;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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