Simulated effects on the Spanish economy of different fiscal stimuli
Based on the REMS model (dynamic general equilibrium model, designed for the evaluation and simulation of economic policies), we have built this tool to simulate the evolution of GDP and employment, depending on three variables: the fiscal policy (increase in public expenditure or reduction of different taxes), the consolidation instrument (fiscal instrument that the government would use to adjust the debt-to-GDP ratio to its initial level) and the speed of consolidation (time it would take for the government to activate the consolidation instrument).
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Instrumento de consolidación
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The data on GDP and the use of this simulation tool are based on the forecasts made by the Ministry of Economy in the 2019-2022 Stability Programme.
In order to make the various simulated fiscal policies comparable, it has been decided that all of them will increase the public deficit by one percentage point of GDP. Likewise, the fiscal rule used guarantees that, given the same volume of the deficit, the correction of the deficit to make the debt sustainable is always of the same magnitude, regardless of the policy being simulated