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Does fiscal consolidation hurt economic growth? Empirical evidence from Spanish regions

Santiago Lago Peñas, Alberto Vaquero-Garcia, Patricio Sánchez-Fernández and Beatriz López-Bermúdez
Authors registered in the RePEc Author Service: Alberto Vaquero García and Santiago Lago-Peñas

No 2019-34, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This article provides empirical evidence on the effect of fiscal consolidation in decentralized countries. The focus on Spain is justified for three reasons. First, it is one of the OECD countries that has been the most affected by the Great Recession in terms of both GDP and public deficit. Second, it is one of the most decentralized countries in the world. Third, the compliance with fiscal consolidation targets has been very diverse across regions. Using both time series econometrics and the synthetic control method approach (SCM), the authors show that compliance with fiscal targets at the regional level has not involved lower GDP growth rates in the short run.

Keywords: fiscal consolidation; regional economic growth; great recession (search for similar items in EconPapers)
JEL-codes: H62 H74 R11 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.economics-ejournal.org/economics/discussionpapers/2019-34
https://www.econstor.eu/bitstream/10419/196167/1/1665112735.pdf (application/pdf)

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