International Macroeconomics, Fiscal Policy, International Finance, Fiscal Federalism
Max Weber Programme Research Project:
Fiscal Devolution and International Macroeconomics in the EU
Debt Dynamics at Different Government Levels
Short description: In this joint work with Marta Rodríguez (ECB) and Javier J. Perez (Banco de España), we analyse sovereign debt structure and yields depending on the government level, distinguishing between federal and non-federal countries.
Fiscal Policy and Trading Partners (link to EEA Gothenburg. 2013)
Abstract: The effects of economic conditions and fiscal policy in trading partners on the domestic economy, in conjunction with fiscal policy in the home country, are the main object of this study. In a panel of OECD economies, we find that the cyclically-adjusted external primary deficit plays a role in determining the growth rate of the home country. Small changes in the fiscal stance of trading partners affect the domestic economy more than large changes. This might be attributed to the transitory nature of large changes and the reaction of the exchange rate and interest rate. Fiscal policy coordination is then of particular importance during normal times.
Other Research Papers:
Bailouts: the Lesser of Two Evils?
Abstract: This paper investigates the relation between bailouts and regulation. Regulation, by limiting the room for government intervention in the market, can affect the likelihood and size of a bailout. We define bailouts as a set of ad-hoc measures taken by the government, aimed at financially helping firms in turmoil, including stock-flow adjustments and State aid. While a higher level of regulation is associated with a lower likelihood of a direct acquisition, such countries resort to a higher use of State aid. We attribute this result to the more transparent nature of direct acquisitions making them the lesser of two evils.
Fiscal Policy during Credit Booms in Europe
Abstract: This paper explores the behaviour of fiscal policy during credit booms peaking in Europe from 1990 onwards. It addresses the question of whether fiscal policy during credit booms is different fiscal policy during normal times in private credit, and whether this difference is due to different behaviours of the cyclical component or whether it can also be traced back to changes in the structural component. Controlling for total revenue and total expenditure, and their components, I find that the behaviour of fiscal variables during credit booms does differ from non-boom periods. This difference is present in both the cyclical and the structural components, suggesting that during times of boom in private credit, the structural component of government expenditure and revenue should be closely monitored, regardless of whether its dynamic is due to actual structural changes or to a failure of the cyclical adjustment to capture the dynamics characterising a credit boom.