Abstract
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.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
