Testing for multiple bubbleshistorical episodes on the sustainability of public debt in Spain, 1850–2020

  1. Vicente Esteve 1
  2. María A. Prats 2
  1. 1 Universitat de València
    info

    Universitat de València

    Valencia, España

    ROR https://ror.org/043nxc105

  2. 2 Universidad de Murcia
    info

    Universidad de Murcia

    Murcia, España

    ROR https://ror.org/03p3aeb86

Aldizkaria:
Applied economic analysis

ISSN: 2632-7627

Argitalpen urtea: 2023

Alea: 31

Zenbakia: 91

Orrialdeak: 1-18

Mota: Artikulua

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Beste argitalpen batzuk: Applied economic analysis

Laburpena

Purpose This paper aims to analyze the dynamics of the Spanish public debt–gross domestic product ratio during the period 1850–2020. Design/methodology/approach This study uses a recent procedure to test for recurrent explosive behavior (Phillips et al., 2011; Phillips et al., 2015a, 2015b) to identify episodes of explosive public debt dynamics and also the episodes of fiscal adjustments over this long period. Findings The identified episodes of explosive behavior of public debt coincided with fiscal stress events, whereas fiscal adjustments and changes in economic policies stabilized public finances after periods of explosive dynamics of public debt. Originality/value The longer than usual span of the data should allow the authors to obtain some more robust results than in most of previous analyses of long-run sustainability.

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