The economic effects of exogenous fiscal shocks in Spain: a SVAR approach

Arbeitspapier

This paper estimates the effects of exogenous fiscal policy shocks in Spain in a VAR framework. Government expenditure expansionary shocks are found to have positive effects on output in the short-term at the cost of higher inflation and public deficits and lower output in the medium and long term. Tax increases are found to drag economic activity in the medium term while entailing an only temporary improvement of the public budget balance. The application of these results to the analysis of fiscal policy in Spain since the mid-nineties points to the conclusion that the consolidation process does not seem to have involved costs in terms of output growth. Moreover, the stance of fiscal policy has become more counter-cyclical in that period.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 647

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; Fiscal Policies and Behavior of Economic Agents: General
• Subject: Fiscal multipliers ; Fiscal shocks ; VAR ; Finanzpolitik ; Schock ; VAR-Modell ; Spanien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): de Castro Fernández, Francisco ; Hernández de Cos, Pablo
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/153081
• Last update: 10.03.2025, 11:43 AM CET