The dynamics of Spanish public debt and sustainable paths for fiscal consolidation

Esposito, Piero and Paradiso, Antonio and Rao, B. Bhaskara (2011): The dynamics of Spanish public debt and sustainable paths for fiscal consolidation.

Abstract

This paper analyses possible patterns for the Spain debt-to-GDP ratio with a small macroeconomic model. The role of international macroeconomic variables (such as the US and French GDP growth rates, prices of raw materials, ECB monetary policy stance) and domestic policy instruments is analyzed in the debt dynamics. We find that external conditions, together with policies aimed to stimulate the growth and fulfilling Maastricht restrictions on deficit, play a fundamental role for fiscal consolidation in Spain and help to reach a sustainable pattern.

• Item Type: MPRA Paper
• Language: English
• Keywords: Debt to GDP Ratio, Spain Economy, International Factors, SUR
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt; H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt ; Debt Management ; Sovereign Debt

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