, Volume 12, Issue 2, pp 219–249 | Cite as

Public debt and economic growth in Spain, 1851–2013

  • Vicente Esteve
  • Cecilio Tamarit
Original Paper


In this paper we investigate the long-run relationship between public debt and economic growth in the Spanish economy for the period 1851–2013. We develop a cliometric analysis of the debt–growth nexus using novel time series methods. We find some support for a negative relationship between both variables, but no clear evidence of a debt threshold. The estimated long-run elasticity in a one-break model shows a tendency to decrease over time from a nonsignificant 0.011 to a −0.070, indicating that a 10 percentage increase in the public debt-to-GDP ratio is associated with 0.70 percentage points lower real economic growth. Indeed, we find for the first subsample (1851–1939) either “decoupling” or “saturation,” while in the second subsample (1940–2000) the long-run elasticity coefficient becomes negative and significant. When we extend our analysis up to 2013, we find a break in 1971 coinciding with the twilight of Franco’s dictatorship and the Spanish transition to democracy.


Public debt Economic growth Fiscal policy Cointegration Multiple structural breaks 

JEL Classification

H63 O49 E62 C22 



The authors acknowledge support from FUNCAS, MINECO (Project ECO2014-58991-C3-2-R), and GV (Project PROMETEOII/2014/053). The paper has been partially elaborated during a stay of C. Tamarit at Harvard University with the support from the European Commission (Project 542434-LLP-1-2013-1-ES-AJM-CL ). The usual disclaimer applies.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.INTECO Joint Research UnitUniversidad de ValenciaValenciaSpain
  2. 2.Universidad de AlcaláAlcalá de HenaresSpain
  3. 3.INTECO Joint Research UnitUniversidad de ValenciaValenciaSpain

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