Fiscal policy response to cycles under two regimes: Spain 1950-1998

Battilosi, Stefano, Escario, Regina and Foreman-Peck, James S. ORCID: https://orcid.org/0000-0001-9826-5725 2013. Fiscal policy response to cycles under two regimes: Spain 1950-1998. Cliometrica 7 (3) , pp. 267-294. 10.1007/s11698-012-0089-4

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Abstract

In the second half of the 20th century Spain provides a case of political regime change which according to some political economy models should also lead to a shift in the cyclical nature of fiscal policy. We find that in most of the pre-democratic era there was a strong pro-cyclical bias to fiscal policy. Eradication began in the last years of the autocratic regime under the influence of fiscal institutional reform and perhaps learning. It was completed after the transition to democracy when counter-cyclical fiscal policy was reinforced in the late 1980s by membership of the European Exchange Rate Mechanism. This experience, established by two separate econometric identification procedures, as well as a narrative drawing especially upon OECD and EIU reports, runs counter to the predictions of the political economy models of Lane (2003) and Alesina et al (2008).

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance
Uncontrolled Keywords:	fiscal policy, business cycle, regime change
Additional Information:	The original publication is available at www.springerlink.com
Publisher:	Springer Verlag
ISSN:	1863-2505
Last Modified:	12 May 2023 04:35
URI:	https://orca.cardiff.ac.uk/id/eprint/40492

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