Is the end of fiscal austerity feasible in Spain ? an alternative planto the current stability programme ( 2015 - 2018 ) Jorge Uxó and Ignacio Álvarez
By: Uxó González, Jorge
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Contributor(s): Álvarez Peralta, Ignacio.
Material type: 
ArticlePublisher: 2017Subject(s): POLITICA FISCAL | GASTO PUBLICO | INCREMENTO | POLITICA DE GASTO PUBLICO | ESPAÑA
In:
Cambridge Journal of Economics v. 41, n. 4, July 2017, p. 999-1020Summary: The Spanish authorities have implemented strongly restrictive fiscal policies with anegative impact on GDP and employment, especially during therecession of 2011.2013. This paper shows that the end of fiscal austerity is feasible for Spain. Adoptinga .functional finance. approach to fiscal policy and making a (partial) use of the ideaof Balanced Budget Expansion, we present an alternative fiscal policy for the years2016.2018 which is not focused on deficit reduction, but on employment creation and on the development of social andstructural policies aimed at a real transformation of the Spanish economy. The two main components of this plan are a progressive fiscal reform to increase public revenue over GDP, and a simultaneous increase in the ratio of public expenditure over GDP. With the aid of a three-equation model,this paper proves that an alternative plan to austerity can be not only expansionarybut also fully compatible with fiscal sustainability. The choice, then, lies betweenprioritisingeither the rate at which unemployment is reduced or at which publicdeficit isreduced.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | OP 1352/2017/4 (Browse shelf) | Available | OP 1352/2017/4 |
Disponible también en línea a través de la Biblioteca del Instituto de Estudios Fiscales. Resumen. Bibliografía.
The Spanish authorities have implemented strongly restrictive fiscal policies with anegative impact on GDP and employment, especially during therecession of 2011.2013. This paper shows that the end of fiscal austerity is feasible for Spain. Adoptinga .functional finance. approach to fiscal policy and making a (partial) use of the ideaof Balanced Budget Expansion, we present an alternative fiscal policy for the years2016.2018 which is not focused on deficit reduction, but on employment creation and on the development of social andstructural policies aimed at a real transformation of the Spanish economy. The two main components of this plan are a progressive fiscal reform to increase public revenue over GDP, and a simultaneous increase in the ratio of public expenditure over GDP. With the aid of a three-equation model,this paper proves that an alternative plan to austerity can be not only expansionarybut also fully compatible with fiscal sustainability. The choice, then, lies betweenprioritisingeither the rate at which unemployment is reduced or at which publicdeficit isreduced.
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