The effect of the European Central Bank’s asset purchase programmes on Spain’s public finances

29 Pages Posted: 17 Jul 2024

See all articles by Pablo Aguilar

Pablo Aguilar

Banco de España

Mario Alloza

Banco de España

James S. Costain

Banco de España - Research Department

Samuel Hurtado

Banco de España

Jaime Martinez-Martin

Banco de España

Date Written: March 18, 2024

Abstract

This paper empirically quantifies the effect on Spain’s public finances of the asset purchase programmes implemented in the euro area between 2015 and 2022. Specifically, it evaluates the impact of the ECB’s Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) on Spanish public revenue, expenditure, deficit and debt. The results suggest that these programmes have had a significant cumulative downward effect on the level of public debt.

Keywords: quantitative easing, asset purchase programmes, unconventional monetary policy, term structure models, signaling and portfolio balance effects, expectations channel, fiscal effects

JEL Classification: E43, E44, E52, E63, E65, G18

Suggested Citation

Aguilar, Pablo and Alloza, Mario and Costain, James S. and Hurtado, Samuel and Martinez-Martin, Jaime, The effect of the European Central Bank’s asset purchase programmes on Spain’s public finances (March 18, 2024). Banco de Espana Occasional Paper No. 2409, Available at SSRN: https://ssrn.com/abstract=4896295 or http://dx.doi.org/10.2139/ssrn.4896295

Pablo Aguilar (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Mario Alloza

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

James S. Costain

Banco de España - Research Department ( email )

Alcala 50
28014 Madrid
Spain

Samuel Hurtado

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

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