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Financial bubbles and sustainability of public debt: The case of Spain

Author

Listed:
  • Vicente Esteve

    (Universidad de Valencia and Universidad de Alcalá, Spain)

  • María A. Prats

    (Universidad de Murcia, Spain)

Abstract

In this paper the dynamics of the Spanish public debt-GDP ratio is analysed during the period 1850-2020. We use a recent procedure to test for recurrent explosive behaviour (Phillips, Wu and Yu, 2011, and Phillips, Shi and Yu, 2015a, 2015b) in order to identify episodes of explosive public debt dynamics and also the episodes of fiscal adjustments over this long period.

Suggested Citation

  • Vicente Esteve & María A. Prats, 2021. "Financial bubbles and sustainability of public debt: The case of Spain," Working Papers 2111, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2111
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    References listed on IDEAS

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    More about this item

    Keywords

    Public debt; Fiscal sustainability; Explosiveness; Recursive unit root test; Spain; COVID-19;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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