Agustín García

Budget deficit and interest rates: empirical evidence for Spain

Evidence, whether international or national, of the significance of the links between budget deficits and interest rates, is in general terms inconclusive. The aim of the present work is to contribute new findings for the Spanish economy using annual data for the period 1964–2000. It is found that budget deficits did not appear to raise long-run nominal interest rates during our sample period.

Explaining aggregate private saving behaviour: new evidence from a panel of OECD countries

This study analyses some of the empirical determinants of aggregate private saving rates for a panel of 21 OECD countries over the period 1964 to 2001. Among the fiscal determinants considered, there is evidence of an important trade-off between public and private saving and a negative effect of higher current public expenditure on private saving. Among the macroeconomic and financial variables introduced, the income growth rate is the most significant and has a positive effect on private saving. Finally, only a demographic variable, the urbanization rate, has a positive effect on private saving. Interestingly, the sub-sample formed by the G-7 countries shows substantial qualitative and quantitative differences in the determinants of aggregate private saving, particularly a reduction of the effects of the fiscal policy variables.

The Effects of Public Expenditure on Private Consumption: A Disaggregated Analysis for Spain (1970-1997)

Abstract The main purpose of this article is to provide empirical evidence for Spain on the dependency relationship between government spending and private consumption at the disaggregated level. To this end, we will use two approaches that extend traditional consumption models, allowing for non-separability of consumers’ preferences between public and private goods and services. The results obtained show significant links between public and private consumption and, in particular, they point towards the importance of carrying out the analysis at the disaggregated level: there is evidence that some components of public and private consumption act as substitutes, whereas others act as complements.