The economic effects of fiscal policy: Further evidence for Spain

Simon Sosvilla-Rivero and Juan J. Rubio-Guerrero

The Quarterly Review of Economics and Finance, 2022, vol. 86, issue C, 305-313

Abstract: Previous research considered the impacts of fiscal policy on economic activity in Spain using Vector autoregression (VAR) models. In this paper, we contribute to the existing literature by making use of autoregressive distributed lag estimation procedures that present significant advantages over the VAR alternative. Our econometric methodology is data-driven, and it allows us to select the statistical model that best approximates the relationship between the variables under study and to assess short- and long-run symmetric and asymmetric effects of fiscal policy on output performance. Using quarterly time-series data for Spain covering the period 1980Q1–2020Q4, we offer quantitative estimates of these effects both for aggregated and disaggregated public expenditures and net revenues. These results would be useful for policymakers in the design of a well-informed macroeconomic and public debt management strategy.

Keywords: Fiscal policy; Public expenditure; Tax revenues; ARDL models; NARDL models (search for similar items in EconPapers)
JEL-codes: C23 E62 H20 H30 H50 O52 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:86:y:2022:i:c:p:305-313

DOI: 10.1016/j.qref.2022.08.002

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