The economic policies developed by the González government closely fit our theoretical expectations (and statistical results) about the policy choices made by social democratic cabinets in an era of highly interdependent economies. In Spain, macroeconomic discipline was given precedence over countercyclical demand management. Inflation was driven down from 14.4 percent in 1982 to 4.8 percent in 1988. The public deficit was cut by half between 1982 and 1987. Within a deflationary framework, the Socialist cabinet directed the public sector to raise the stock of fixed and human capital. Public revenues rose by over a fifth in a decade. Until the late 1980s almost all new revenues were spent on increasing public savings, building infrastructures, and financing education and training programs. Public businesses in key sectors stepped up investment and the government engaged in the formation of several internationally competitive “national champions.”

Nevertheless, the PSOE's two-pronged economic strategy of macroeconomic stability and state interventionism was constrained by two factors: in the first place, Spain's industrial relations system and union movement; in the second place, the increasing difficulties González experienced in reconciling the demands of (anti-tax) moderate voters and (pro-spending) radical voters, who had jointly supported him in the first half of the 1980s.

The institutional organization of the Spanish economy, particularly the structure of its labor market, was only partially conducive to the PSOE's most preferred strategy.