Carlos Mulas Granados

Carlos Mulas Granados
International Monetary Fund · Fiscal Affairs Department

PhD, Economics, University of Cambridge, UK

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69
Publications
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Publications

Publications (69)
Article
We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion ) are associated with better fiscal performance, but fixed exchange rates may revert this result...
Article
Full-text available
The sizeable fiscal consolidation required to stabilize the debt-to- GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we propose a methodology to identify historical fiscal adjustment episodes for countries that both needed and wanted to adjust in order to s...
Article
This article analyzes the causes and consequences of fiscal consolidation promise gaps, defined as the distance between planned fiscal adjustments and actual consolidations. Using 74 consolidation episodes derived from the narrative approach in 17 advanced economies during 1978–2015, the paper shows that promise gaps were sizeable (about 0.3% of gr...
Article
Are blind spots of public debt spikes sizable? And how do they affect financial stress indicators? This paper tackles these questions empirically, using information from 179 episodes of public debt spikes between 1945 and 2014. We find that large public debt spikes are neither driven by high primary deficits nor by output declines but instead by st...
Article
We examine how exchange rate regimes affect fiscal discipline by investigating European countries as they transitioned from flexible to fully fixed exchange rates under the Euro. We apply the synthetic control method to estimate, for each Eurozone country, its counterfactual budget stance under flexible rates. Our evidence strongly suggests that fi...
Article
This paper explores the impact of elections on public investment. Working with a sample of 67 presidential and parliamentary democracies between 1975 and 2012, we find that the growth rate of nominal public investment is higher at the beginning of electoral cycles and decelerates thereafter. The peak in public investment growth occurs 28 months bef...
Article
In this paper, we study the impact of fragmented politics on public debt—in particular, between two consecutive legislative elections. Using data for 92 advanced and developing countries during 1975-2015, we find a positive association between political fragmentation and public debt changes. Corruption magnifies the effects; with higher perceived...
Article
We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result...
Article
This paper is motivated by two parallel trends: the declining labor share of income and increasing inequality. Micro and macroeconomic data, covering up to 93 countries between 1970 and 2013, are used to assess whether the declining labor share of income has been a key factor driving growing inequality. The major conclusion is that changes in incom...
Technical Report
Full-text available
The sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we rely on historical evidence from a sample of 91 adjustment episodes of countries during 1945–2012 that needed and wanted to adjust in orde...
Article
Full-text available
This paper assesses the effects of fiscal consolidations associated with public debt reduction on medium-term output growth during periods of private debt deleveraging. The analysis covers 107 countries and 79 episodes of public debt reduction driven by discretionary fiscal adjustments during 1980–2012. It shows that expenditure-based, front-loaded...
Article
Full-text available
This paper assesses the determinants of the duration of debt reduction episodes in a large sample of countries over the last three decades using a survival model. Results show that increases in the primary balances are the main source of debt reduction. Expenditure-based fiscal adjustments are key for reducing the length of debt consolidation spell...
Article
Full-text available
This paper analyzes the experience of 99 advanced and developing economies in restoring fiscal sustainability during 1980 - 2008 after banking crises, which led to large accumulation of public debt. It finds that successful debt reductions have relied chiefly on generation of large primary surpluses in post-crisis years through current expenditure...
Article
The authors use an ordered logit model to assess the effects of fiscal stimulus packages during episodes of systemic banking crisis in advanced and emerging market countries over the period 1980-2008. The results show that timely countercyclical fiscal measures can help shorten crises by boosting aggregate demand and offsetting the collapse of priv...
Article
Full-text available
This paper studies the effects of fiscal policy response in 118 episodes of systemic banking crisis in advanced and emerging market countries during 1980-2008. It finds that timely countercyclical fiscal measures contribute to shortening the length of crisis episodes by stimulating aggregate demand. Fiscal expansions that rely mostly on measures to...
Article
Full-text available
This ARI looks at the criticism of, and solutions to, Europe�s economic governance that have been raised during recent years and offers a brief reflection on the slight improvements introduced in the Lisbon Treaty (2007), that remains to be ratified. It concludes with some reflections on the lessons that could be learnt from the current financial c...
Article
Full-text available
Subsidy reform has been a key component of the pre-accession reform agenda of the 10 new member states that joined the EU in 2004 (EU-10). During the pre-accession period, these countries had to undertake a number of important structural reforms in their economies. One of the most critical reforms was to reduce, and in some cases, eliminate their s...
Article
The first part of this article explores whether convergence has occurred in technology and income across EU regions during the period 1990-2002. The second part evaluates whether these two processes of convergence are related to each other. With respect to the first question, we find that all R&D indicators and patents have converged among regions...
Article
Full-text available
This article examines the political and economic determinants of the relative duration of fiscal consolidations in Europe. The study focuses on the fifteen Member States that formed the EU between 1960 and 2004, and applies survival analysis techniques to their fiscal data. We find evidence that the probability of ending a period of fiscal consolid...
Article
This paper studies the influence that the recently reformed budgetary institutions in the new EU member states may have had on their public finances. We test if their newly formed institutions have already started to shape their fiscal outcomes, as EU-15 institutions did in the past. To answer this question, this paper develops new institutional in...
Article
Full-text available
Este trabajo expone los rasgos básicos del Programa Nacional de Reformas que, desde 2005, sirve como marco para las políticas macroeconómicas y de oferta que se aplican en España en el contexto de la nueva Estrategia de Lisboa. Además, este trabajo hace un balance del primer año de aplicación del programa, a la luz de los datos económicos publicado...
Article
Full-text available
This paper investigates the political and economic determinants of successful fiscal adjustment in 25 emerging market economies from 1980 to 2001. The results show that large and back-loaded fiscal adjustments have the highest likelihood of success. Fiscal consolidations based on expenditure cuts increase the probability of approaching and achievin...
Book
Motivated by the proliferation of fiscal consolidation episodes in the advent of Monetary Union, this book explains the causes and consequences of fiscal policy in Europe, using theory and empirical evidence from the last four decades.
Article
Full-text available
Ten new countries joined the EU in 2004, and some of them will soon also join the euro. Since their incorporation to the single currency is subject to their fulfilment of the Maastricht criteria that current members already fulfilled in 1998, this paper describes and compares these fiscal adjustments. Because fiscal consolidations vary in their tim...
Chapter
A central concern when considering the political economy of fiscal adjustments is whether or not these adjustments have any economic consequences.
Chapter
Equally important as the economic consequences brought about by fiscal adjustments is the question of whether or not these adjustments have any political consequence for the cabinets that implement these policies.*
Chapter
In the context of the clear limits established by the Maastricht Treaty and the Stability and Growth Pact, to affirm that fiscal policy is not as homogeneous across Europe as could be expected in a monetary union because domestic economic and political factors still have a strong influence, may appear unconvincing in spite of the statistical eviden...
Chapter
The choice of which budget components will be increased or decreased during a fiscal adjustment episode in order to achieve a balanced budget is the crucial dimension of any strategy of fiscal consolidation.
Chapter
Any analysis of the use that governments make of fiscal policies would lack clarity if it were not understood in the broader context of economic policymaking. One cannot start discussing the variation of fiscal policy and fiscal adjustment strategies along time and among different European countries, without first outlining the main characteristics...
Chapter
The intention of this book was to explore the economic and political factors that affect the formulation of fiscal policies in the European Union, with a particular emphasis on understanding what explains that different countries followed different strategies of fiscal adjustment, when they all attempted to achieve the same aggregate fiscal outcome...
Chapter
This chapter answers the first of these questions about the timing of fiscal consolidations, and half of the second question, in the part that refers to the duration dimension of fiscal adjustments. The chapter also constitutes the first step in the empirical effort of this book to validate or refute with actual evidence the theoretical hypotheses...
Article
This article explores the spatial distribution of regional technology indicatorsin the EU over the last decade and its impact on cohesion. Thus, we find thatpublic R&D spending and patent applications have converged among regions duringthe nineties. On the other hand, private R&D activities have diverged, as a result of anasymmetric expansion durin...
Article
Full-text available
This paper assesses the effects of fiscal consolidation and expenditure composition on economic growth in a sample of 39 low-income countries during the 1990s. The paper finds that strong budgetary positions are generally associated with higher economic growth in both the short and long terms. The composition of public outlays also matters: countri...
Article
Full-text available
This article examines the short-term economic impact of alternative fiscal adjustment strategies, with an especial focus on their effect on economic growth and income distribution Based on a sample of 53 adjustment episodes occurred in the fifteen EU Member States between 1960-2000, this article shows that different strategies of fiscal adjustment...
Conference Paper
Full-text available
En este trabajo se analizan las diferencias en los procesos de saneamiento de las finanzas públicas de los nuevos Estados miembros de la UE, centrándonos en aquellos que proceden del área de influencia soviética y en los dos candidatos a la próxima adhesión en 2007 (Bulgaria y Rumania). El objetivo del trabajo es determinar la influencia que las di...
Article
This article analyses the electoral consequences of fiscal adjustments for the governments that implement them. Using probit analysis on a panel of 15 EU member states between 1960 and 2000, this article tests whether an improving budgetary situation has any effect on the probability of prime minister re-election. Contrary to what previous influent...
Article
Full-text available
This study assesses effects of expenditure composition and other variables on the duration of fiscal adjustment episodes in a sample of 29 developing countries. Using survival analysis, the study finds that expenditure composition, size of the fiscal consolidation, and past performance on fiscal consolidation affect the persistence of adjustment.
Article
Full-text available
This paper examines the economic impact of alternative budgetary compositions with an special focus on the effect that different fiscal adjustment strategies have on growth and equality. Based on a sample of 53 adjustment episodes occurred in the fifteen EU Member States between 1960-2000, this paper shows that different strategies of fiscal adjust...
Article
Full-text available
This paper explores the political and economic determinants of fiscal adjustment strategies in the European Union (EU) between 1970 and 2001. Results confirm the hypotheses that, besides economic conditions, fragmentation of decision-making, ideology of the party in government, and closeness to elections affect fiscal policy in general and adjustme...
Article
Full-text available
This paper assesses the effects of expenditure composition as well as fiscal adjustment on economic growth in a sample of 39 low-income countries during the 1990s. The paper finds that strong budgetary positions and fiscal consolidation are generally associated with higher economic growth in both the short and long terms. The composition of public...
Article
Full-text available
This paper examines the duration of fiscal consolidations among the fifteen EU Members States using data from the European Commission for the period 1960-2000. Using the duration model approach, we estimate the hazard and survivor functions of our series. Then we discuss what is the duration model that best fits our data, and which are the explanat...
Article
Full-text available
This paper studies the influence that the recently reformed budgetary institu-tions in the new EU member states may have had on their public finances. We test if their newly formed institutions have already started to shape their fiscal outcomes, as EU-15 institutions did in the past. To answer this question, this article develops new institutional...
Article
Full-text available
Resumen Este artículo se pregunta por las respuestas que están dando los Estados de bienestar en Europa para ser sostenibles, a la vista de los nuevos riesgos a los que han de dar cobertura, como consecuencia de la globalización, el cambio demográfico y el cambio tecnológico. Además de reformar los pilares tradicionales del modelo social europeo, l...
Article
Full-text available
Este análisis valora la actualización del Programa Nacional de Reformas (PNR) de España para cumplir los objetivos de la Estrategia de Lisboa, que fue aprobado por el Consejo de Ministros el pasado 13 de octubre y enviado a Bruselas, por segundo año consecutivo.
Article
Full-text available
In this working paper we analyse the relationship between budgetary institutions and the performance of public finances in ten of the twelve countries that joined the EU in 2004 and 2007 (Cyprus and Malta excluded). We review the latest contributions in the literature on institutional aspects of fiscal policy, and highlight different economic and p...

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