Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case
Concerns over sustainability and the cyclical pattern of public finances have been especially great since the onset of the global financial crisis. This thesis comprises four essays which aim to examine those concerns with regard to the Spanish Autonomous Communities (ACs). The first paper analyses...
| Autor: | |
|---|---|
| Tipo de recurso: | tesis doctoral |
| Estado: | Versión publicada |
| Fecha de publicación: | 2018 |
| País: | España |
| Institución: | CBUC, CESCA |
| Repositorio: | TDR. Tesis Doctorales en Red |
| OAI Identifier: | oai:www.tdx.cat:10803/663273 |
| Acceso en línea: | http://hdl.handle.net/10803/663273 |
| Access Level: | acceso abierto |
| Palabra clave: | Política fiscal Fiscal policy Deute públic Deuda pública Public debt Impostos Impuestos Taxation Finances autonòmiques Hacienda autonómica Autonomic public finance Ciències Jurídiques, Econòmiques i Socials 33 |
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| dc.title.none.fl_str_mv |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| title |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| spellingShingle |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case Mussons, Joan Maria Política fiscal Fiscal policy Deute públic Deuda pública Public debt Impostos Impuestos Taxation Finances autonòmiques Hacienda autonómica Autonomic public finance Ciències Jurídiques, Econòmiques i Socials 33 |
| title_short |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| title_full |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| title_fullStr |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| title_full_unstemmed |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| title_sort |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish Case |
| dc.creator.none.fl_str_mv |
Mussons, Joan Maria |
| author |
Mussons, Joan Maria |
| author_facet |
Mussons, Joan Maria |
| author_role |
author |
| dc.contributor.none.fl_str_mv |
Bosch Roca, Núria; Raymond Bara, José Luis Bosch Roca, Núria Universitat de Barcelona. Facultat d'Economia i Empresa |
| dc.subject.none.fl_str_mv |
Política fiscal Fiscal policy Deute públic Deuda pública Public debt Impostos Impuestos Taxation Finances autonòmiques Hacienda autonómica Autonomic public finance Ciències Jurídiques, Econòmiques i Socials 33 |
| topic |
Política fiscal Fiscal policy Deute públic Deuda pública Public debt Impostos Impuestos Taxation Finances autonòmiques Hacienda autonómica Autonomic public finance Ciències Jurídiques, Econòmiques i Socials 33 |
| description |
Concerns over sustainability and the cyclical pattern of public finances have been especially great since the onset of the global financial crisis. This thesis comprises four essays which aim to examine those concerns with regard to the Spanish Autonomous Communities (ACs). The first paper analyses fiscal policy responsiveness of Spanish ACs over the cycle. We estimate fiscal reaction functions to analyze the response of ACs’ fiscal impulse and fiscal stance. On the one hand, an analysis of the change in the primary balance (the fiscal impulse) suggests counter-cyclicality over the period 1987-2008, but afterwards an a-cyclical impulse until 2012. Foral ACs stand out from other ACs, as their response is much more counter-cyclical. We do not find evidence regarding any asymmetric behaviour of ACs in good or bad periods. On the other hand, the response of ACs’ fiscal stance indicates that ACs’ discretionary fiscal behaviour has been pro-cyclical. This pro-cyclicality has sharpened since the last crisis, which is especially worrisome as health, education and social services expenditures are within regional responsibilities. The second paper addresses the primary balance response to the debt of Spanish ACs from 1987 to 2015. Overall, the results of this study provide evidence of a nonlinear relationship between these variables, which points to a situation of fiscal fatigue and reduced fiscal space. The empirical framework builds mainly on the works of Bohn (1998) and Gosh et al. (2013), thereby also focusing on uncertainty issues. In 2015 the regional debt ratio stood at 26.8% of Gross Value Added, slightly above our lower estimate for the debt limit (24%) and well below the upper estimate (36%). A reduced fiscal space in ACs calls for measures to ensure a sustainable debt trajectory and regain some room to deal with potential negative shocks. The third paper deals with personal income tax (PIT) revenue elasticities, which is the most important revenue source for Spanish ACs. We apply an error correction model to estimate PIT revenue elasticities in common regime ACs. The stability of these elasticities is checked and short-run asymmetries are identified. A tax overreaction is identified when PIT revenue is above the long-run equilibrium while a typical error correction model response is obtained when PIT revenue is below. Some simulations are provided to evaluate the dynamic adjustment between short and long-run elasticities and their consequences for fiscal pressure. Some findings regarding cross-sectional variability should also be noted: short and especially long-run elasticities present a decreasing pattern in respect to per capita income. Another noteworthy contribution is the analysis of forecasting performance in the presence of an endogeneity relationship. Despite the OLS estimator bias, its superiority is made clear (analytically and empirically) in comparison to the IV estimator. The forth paper examines potential GDP and structural budget balances at regional level, following the methodology of the European Commission (EC). These are instruments used to guide economic policy, widespread at state level but much less at regional level. Measuring the cyclical position enables us to make an appraisal of the Catalan fiscal stance since 2004. In short, the fiscal policy of the Generalitat of Catalonia has been pro-cyclical, except for the first budgetary response to the crisis and the recovery period beginning in the second half of 2013. In years to come, the available fiscal space (in terms of debt) can condition the fiscal stance. This paper also points out the main limitations of the EC methodology. Finally, alternative estimates of Catalan potential GDP based on unobserved components models are presented, as well as an assessment based on their reliability and usefulness for inflation and GDP growth forecasting performance. |
| publishDate |
2018 |
| dc.date.none.fl_str_mv |
2018 2018 2018 |
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info:eu-repo/semantics/doctoralThesis info:eu-repo/semantics/publishedVersion |
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doctoralThesis |
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publishedVersion |
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http://hdl.handle.net/10803/663273 |
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http://hdl.handle.net/10803/663273 |
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Inglés |
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Inglés |
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info:eu-repo/semantics/openAccess |
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openAccess |
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245 p. application/pdf application/pdf |
| dc.publisher.none.fl_str_mv |
Universitat de Barcelona |
| publisher.none.fl_str_mv |
Universitat de Barcelona |
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TDX (Tesis Doctorals en Xarxa) reponame:TDR. Tesis Doctorales en Red instname:CBUC, CESCA |
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CBUC, CESCA |
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TDR. Tesis Doctorales en Red |
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TDR. Tesis Doctorales en Red |
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1869405414592872448 |
| spelling |
Cyclical Patterns and Sustainability of Fiscal Policy at Regional Level: the Spanish CaseMussons, Joan MariaPolítica fiscalFiscal policyDeute públicDeuda públicaPublic debtImpostosImpuestosTaxationFinances autonòmiquesHacienda autonómicaAutonomic public financeCiències Jurídiques, Econòmiques i Socials33Concerns over sustainability and the cyclical pattern of public finances have been especially great since the onset of the global financial crisis. This thesis comprises four essays which aim to examine those concerns with regard to the Spanish Autonomous Communities (ACs). The first paper analyses fiscal policy responsiveness of Spanish ACs over the cycle. We estimate fiscal reaction functions to analyze the response of ACs’ fiscal impulse and fiscal stance. On the one hand, an analysis of the change in the primary balance (the fiscal impulse) suggests counter-cyclicality over the period 1987-2008, but afterwards an a-cyclical impulse until 2012. Foral ACs stand out from other ACs, as their response is much more counter-cyclical. We do not find evidence regarding any asymmetric behaviour of ACs in good or bad periods. On the other hand, the response of ACs’ fiscal stance indicates that ACs’ discretionary fiscal behaviour has been pro-cyclical. This pro-cyclicality has sharpened since the last crisis, which is especially worrisome as health, education and social services expenditures are within regional responsibilities. The second paper addresses the primary balance response to the debt of Spanish ACs from 1987 to 2015. Overall, the results of this study provide evidence of a nonlinear relationship between these variables, which points to a situation of fiscal fatigue and reduced fiscal space. The empirical framework builds mainly on the works of Bohn (1998) and Gosh et al. (2013), thereby also focusing on uncertainty issues. In 2015 the regional debt ratio stood at 26.8% of Gross Value Added, slightly above our lower estimate for the debt limit (24%) and well below the upper estimate (36%). A reduced fiscal space in ACs calls for measures to ensure a sustainable debt trajectory and regain some room to deal with potential negative shocks. The third paper deals with personal income tax (PIT) revenue elasticities, which is the most important revenue source for Spanish ACs. We apply an error correction model to estimate PIT revenue elasticities in common regime ACs. The stability of these elasticities is checked and short-run asymmetries are identified. A tax overreaction is identified when PIT revenue is above the long-run equilibrium while a typical error correction model response is obtained when PIT revenue is below. Some simulations are provided to evaluate the dynamic adjustment between short and long-run elasticities and their consequences for fiscal pressure. Some findings regarding cross-sectional variability should also be noted: short and especially long-run elasticities present a decreasing pattern in respect to per capita income. Another noteworthy contribution is the analysis of forecasting performance in the presence of an endogeneity relationship. Despite the OLS estimator bias, its superiority is made clear (analytically and empirically) in comparison to the IV estimator. The forth paper examines potential GDP and structural budget balances at regional level, following the methodology of the European Commission (EC). These are instruments used to guide economic policy, widespread at state level but much less at regional level. Measuring the cyclical position enables us to make an appraisal of the Catalan fiscal stance since 2004. In short, the fiscal policy of the Generalitat of Catalonia has been pro-cyclical, except for the first budgetary response to the crisis and the recovery period beginning in the second half of 2013. In years to come, the available fiscal space (in terms of debt) can condition the fiscal stance. This paper also points out the main limitations of the EC methodology. Finally, alternative estimates of Catalan potential GDP based on unobserved components models are presented, as well as an assessment based on their reliability and usefulness for inflation and GDP growth forecasting performance.Universitat de BarcelonaBosch Roca, Núria; Raymond Bara, José LuisBosch Roca, NúriaUniversitat de Barcelona. Facultat d'Economia i Empresa201820182018info:eu-repo/semantics/doctoralThesisinfo:eu-repo/semantics/publishedVersion245 p.application/pdfapplication/pdfhttp://hdl.handle.net/10803/663273TDX (Tesis Doctorals en Xarxa)reponame:TDR. Tesis Doctorales en Redinstname:CBUC, CESCAInglésADVERTIMENT. L'accés als continguts d'aquesta tesi doctoral i la seva utilització ha de respectar els drets de la persona autora. Pot ser utilitzada per a consulta o estudi personal, així com en activitats o materials d'investigació i docència en els termes establerts a l'art. 32 del Text Refós de la Llei de Propietat Intel·lectual (RDL 1/1996). Per altres utilitzacions es requereix l'autorització prèvia i expressa de la persona autora. En qualsevol cas, en la utilització dels seus continguts caldrà indicar de forma clara el nom i cognoms de la persona autora i el títol de la tesi doctoral. No s'autoritza la seva reproducció o altres formes d'explotació efectuades amb finalitats de lucre ni la seva comunicació pública des d'un lloc aliè al servei TDX. Tampoc s'autoritza la presentació del seu contingut en una finestra o marc aliè a TDX (framing). Aquesta reserva de drets afecta tant als continguts de la tesi com als seus resums i índexs.info:eu-repo/semantics/openAccessoai:www.tdx.cat:10803/6632732026-06-14T12:46:07Z |
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15.301603 |