A new assessment of the Troika ´s economic policy for Portugal in 2012 following an Input-Output approach

José Coelho

No 2020/0121, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: This article proposes a new evaluation of the economic and financial adjustment programmenegotiated between Portugal and the Troika (European Commission, European Central Bank and International Monetary Fund) for the year 2012, in an Input-Output framework. As in Amaral and Lopes (2017), a comparison is made between the unemployment rate forecast for 2012 and that which would result from obtaining the implicit target for the external deficit, concluding that the unemployment rate was underestimated by almost twopercentage points. We also concluded that the achievement of the implicit targetfor the external deficit in 2012 would only be compatible with the establishment of a lower budget deficit and a lower of weight of budget deficit on GDPfor that year. Such an objective would require a smaller amount of transfers made by the Government to households and would result in greater contractions in private consumption and GDP and would result in a higher unemployment rate than that expected by the Troika for 2012.

Keywords: unemployment; external deficit; budget deficit; Troika; Portugal (search for similar items in EconPapers)
JEL-codes: C67 D57 E61 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-eec and nep-mac
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