Resumen de Some new results on the estimation of structural budget balance for Spain

Guido Zack, Pilar Poncela Blanco, Eva Senra Díaz, Daniel Federico Sotelsek Salem

• The recession that started in 2008 caused a sharp deterioration of the budget balance of Spain. This de-cline was not fully anticipated by the structural budget balance due to some methodology limitations.In this article, we calculate an alternative structural balance for Spain in the years prior to the subprimecrisis that includes residential investment as an explanatory variable. This estimate shows that by 2004the Spanish fiscal situation was not as strong as presumed. This fragility was hidden by the extraordi-nary revenue from the real estate bubble and the construction boom.