Research Areas

According to the golden rule, the sustainability of public accounts is not endangered if financed expenditures are productive and an increase in GDP results in fiscal resources that allow debt amortization. In this regard, it is important to consider which public investments are productive, i.e., those that meet this sustainability criterion.

In the past, public investments in physical assets have been excluded from the deficit under consideration by the fiscal rules because they are viewed as expenditures that will have a positive impact on GDP in the medium and long term, allowing to recover the initial investment. The Spanish Ministry of Inclusion and Social Security wants to consider whether certain social expenditures, especially some in education, can also offer returns that justify the same exclusion by contributing to human capital and, through this asset, to employment and productivity improvement.

The Ivie will be in charge of developing a research study that analyzes these issues and can support the Spanish Government’s proposal that certain expenditures on human capital should be considered similar to investments in tangible assets.