Optimal public deficit and tax-smoothing in the Spanish economy, 1850-2022

• Congregado, Emilio ^[1] ; Esteve, Vicente ^[3] ; Prats, María A. ^[2]
  1. [1] Universidad de Huelva

     Universidad de Huelva

     Huelva, España

     
  2. [2] Universidad de Murcia

     Universidad de Murcia

     Murcia, España

     
  3. [3] Universidad de Alcal·

  Mostrar afiliaciones +
• Localización: Documentos de Trabajo (IAES, Instituto Universitario de Análisis Económico y Social), ISSN-e 2172-7856, Nº. 1, 2024, págs. 1-39
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • In this paper, we provide a formal test of Barroís tax-smoothing model, using Spanish data covering the period 1850ñ2022. First, we found that the tax-tilting component has been very important for the Spanish government and is a symptom of the existence of a public deÖcit bias that has existed in Spanish public Önances over the sample period. Second, our empirical Öndings do also support the existence of tax-smoothing in Spanish Öscal policy throughout the sample period. Consequently, there is some evidence that the Spanish economy has engaged in tax-smoothing behavior over the period analyzed, as the Spanish governments responded to expected future changes in government spending by running budget imbalances, rather than altering contemporaneous government revenues