Link between private debt and public surplus in Spain

Throughout recent history, the Spanish economy registered a fiscal surplus only between 2005 and 2007. Analysts agree that this surplus was a product of the extraordinary economic growth, but they often fail to notice that it was based on similarly exceptional growth in private debt, which was a nec...

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Detalles Bibliográficos
Autores: Garzón Espinosa, Eduardo, Medialdea García, Bibiana, Cruz Hidalgo, Esteban, Sánchez Mato, Carlos
Tipo de recurso: artículo
Fecha de publicación:2022
País:España
Institución:Universidad Autónoma de Madrid
Repositorio:Biblos-e Archivo. Repositorio Institucional de la UAM
Idioma:inglés
OAI Identifier:oai:repositorio.uam.es:10486/717575
Acceso en línea:http://hdl.handle.net/10486/717575
https://dx.doi.org/10.1080/01603477.2022.2068035
Access Level:acceso abierto
Palabra clave:Sectoral balances
Spain
Financial bubble
Fiscal rules
Private debt
Public surplus
Economía
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spelling Link between private debt and public surplus in SpainGarzón Espinosa, EduardoMedialdea García, BibianaCruz Hidalgo, EstebanSánchez Mato, CarlosSectoral balancesSpainFinancial bubbleFiscal rulesPrivate debtPublic surplusEconomíaThroughout recent history, the Spanish economy registered a fiscal surplus only between 2005 and 2007. Analysts agree that this surplus was a product of the extraordinary economic growth, but they often fail to notice that it was based on similarly exceptional growth in private debt, which was a necessary condition for achieving fiscal surplus. This finding can be illuminated from the vantage of sectoral balances: in economies that usually run a current account deficit, such as Spain’s, a public surplus can be achieved only in situations characterized by a credit bubble. To verify this idea we examine the impact that the Spanish real estate and credit bubble had on public accounts, and we also estimate an econometric model of autoregressive vectors. The results corroborate the working hypothesis: Spain’s only fiscal surplus in recent years was achieved thanks to the largest private indebtedness process in the country’s history. This evidence could have important implications in terms of economic policy, because economies with regular current account deficits such as Spain could have difficulties in achieving their fiscal goals without experiencing credit boomsRoutledgeDepartamento de Economía y Hacienda PúblicaFacultad de Ciencias Económicas y Empresariales20222022-05-16research articlehttp://purl.org/coar/resource_type/c_2df8fbb1AMhttp://purl.org/coar/version/c_ab4af688f83e57aainfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10486/717575https://dx.doi.org/10.1080/01603477.2022.2068035reponame:Biblos-e Archivo. Repositorio Institucional de la UAMinstname:Universidad Autónoma de MadridInglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial 4.0 Internationalhttp://creativecommons.org/licenses/by-nc/4.0/info:eu-repo/semantics/openAccessoai:repositorio.uam.es:10486/7175752026-06-23T12:46:27Z
dc.title.none.fl_str_mv Link between private debt and public surplus in Spain
title Link between private debt and public surplus in Spain
spellingShingle Link between private debt and public surplus in Spain
Garzón Espinosa, Eduardo
Sectoral balances
Spain
Financial bubble
Fiscal rules
Private debt
Public surplus
Economía
title_short Link between private debt and public surplus in Spain
title_full Link between private debt and public surplus in Spain
title_fullStr Link between private debt and public surplus in Spain
title_full_unstemmed Link between private debt and public surplus in Spain
title_sort Link between private debt and public surplus in Spain
dc.creator.none.fl_str_mv Garzón Espinosa, Eduardo
Medialdea García, Bibiana
Cruz Hidalgo, Esteban
Sánchez Mato, Carlos
author Garzón Espinosa, Eduardo
author_facet Garzón Espinosa, Eduardo
Medialdea García, Bibiana
Cruz Hidalgo, Esteban
Sánchez Mato, Carlos
author_role author
author2 Medialdea García, Bibiana
Cruz Hidalgo, Esteban
Sánchez Mato, Carlos
author2_role author
author
author
dc.contributor.none.fl_str_mv Departamento de Economía y Hacienda Pública
Facultad de Ciencias Económicas y Empresariales
dc.subject.none.fl_str_mv Sectoral balances
Spain
Financial bubble
Fiscal rules
Private debt
Public surplus
Economía
topic Sectoral balances
Spain
Financial bubble
Fiscal rules
Private debt
Public surplus
Economía
description Throughout recent history, the Spanish economy registered a fiscal surplus only between 2005 and 2007. Analysts agree that this surplus was a product of the extraordinary economic growth, but they often fail to notice that it was based on similarly exceptional growth in private debt, which was a necessary condition for achieving fiscal surplus. This finding can be illuminated from the vantage of sectoral balances: in economies that usually run a current account deficit, such as Spain’s, a public surplus can be achieved only in situations characterized by a credit bubble. To verify this idea we examine the impact that the Spanish real estate and credit bubble had on public accounts, and we also estimate an econometric model of autoregressive vectors. The results corroborate the working hypothesis: Spain’s only fiscal surplus in recent years was achieved thanks to the largest private indebtedness process in the country’s history. This evidence could have important implications in terms of economic policy, because economies with regular current account deficits such as Spain could have difficulties in achieving their fiscal goals without experiencing credit booms
publishDate 2022
dc.date.none.fl_str_mv 2022
2022-05-16
dc.type.none.fl_str_mv research article
http://purl.org/coar/resource_type/c_2df8fbb1
AM
http://purl.org/coar/version/c_ab4af688f83e57aa
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10486/717575
https://dx.doi.org/10.1080/01603477.2022.2068035
url http://hdl.handle.net/10486/717575
https://dx.doi.org/10.1080/01603477.2022.2068035
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial 4.0 International
http://creativecommons.org/licenses/by-nc/4.0/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial 4.0 International
http://creativecommons.org/licenses/by-nc/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Routledge
publisher.none.fl_str_mv Routledge
dc.source.none.fl_str_mv reponame:Biblos-e Archivo. Repositorio Institucional de la UAM
instname:Universidad Autónoma de Madrid
instname_str Universidad Autónoma de Madrid
reponame_str Biblos-e Archivo. Repositorio Institucional de la UAM
collection Biblos-e Archivo. Repositorio Institucional de la UAM
repository.name.fl_str_mv
repository.mail.fl_str_mv
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