1. The Economic Costs of a Secessionist Conflict: The Case of Catalonia
- Author
-
Alejandro Esteller-Moré and Leonzio Rizzo
- Subjects
capital Flows ,Economics and Econometrics ,Cash-flow ,Economics ,media_common.quotation_subject ,Referendum ,independence ,0211 other engineering and technologies ,SH1_12 ,02 engineering and technology ,economic Uncertainty ,Economia ,Secession ,Politics ,Economica ,Economic cost ,0502 economics and business ,Incertesa ,Referèndum de l'1 d'octubre de 2017, Catalunya ,Secessió ,050207 economics ,Capital flows ,media_common ,021110 strategic, defence & security studies ,Economic uncertainty ,Cost control ,05 social sciences ,Catalan independence referendum, 2017 ,Uncertainty ,SH1_5 ,Flux de caixa ,SH1_6 ,Control de costos ,synthetic Control Method ,Independence ,Political economy ,Social Sciences (miscellaneous) - Abstract
Due to the pro-independence demands of part of its electorate, the political fit of Catalonia within Spain has given rise to notable political tensions over the last few years. This conflict has progressively affected several dimensions of Catalan society, including, potentially, the economy. The illegal referendum on independence, held in October 2017, marked the climax of political and social tensions, leading to a Constitutional crisis and further stoking the conflict as opposed to offering any hope of an early resolution. We analyze a complete set of margins potentially affected by the referendum, including real (aggregate demand and supply) and financial responses. Using a synthetic control method, we find strong evidence of the outflow of short-term bank deposits after the referendum; while, on the real side, we find evidence of responses in aggregate supply (number of capital increases and number of new firms registered).
- Published
- 2022