Fiscal policy responses to changes in the cyclical position of the Autonomous Communities: an empirical analysis

• Autores: Joan Maria Mussons Olivella
• Localización: XX Encuentro Economía Pública: estado del bienestar. Sostenibilidad y reformas, 2013, ISBN 978-84-695-6945-0, pág. 80
• Idioma: inglés
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• Resumen

  • This paper analyses the responsiveness of Spanish ACs (Autonomous Communities) fiscal policy to changes in the cyclical position as we ll as to other determinants such as institutional and political economy features. ACs fiscal poli cy is countercyclical despite surpluses in expansions do not offset deficits in downtur ns. However, we cannot infer an asymmetric reaction of Spanish ACs fiscal policy to the cycl e. Results also suggest that as education and health were devolved ACs primary budget balance (PBB) worsened, which may be indicative of underfunded responsibilities. We also identify a signi ficant effect of relative fiscal resources of ACs financing system on PBB, which should be taken into account as there have been great disparities. In addition, there is a strong iner tial component in ACs PBB, and legislative fiscal rules and fiscal corre sponsibility present a posit ive effect on PBB until the latest global financial crisis. Lastly, it should also be noted that the fiscal stance of ACs worsens the year before elections