Weak Economic Conditions and the Objective of the Government Programme

Jetro Anttonen, Markku Lehmus and Vesa Vihriälä

No 86, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract The key economic objectives of the current Finnish government are valid only in normal international economic conditions. However, weaker than normal conditions have not been defined. We propose to base such a definition on the expected negative deviation from the euro-area gdp path projected by a statistical model. This implies that the probability of weak economic conditions would be about 20 per cent. Our simulations suggest that a negative deviation of international economic conditions from the normal conditions as defined by us would weaken GDP, employment and public finances in Finland significantly. The employment rate could end up even 2 percentage points smaller than in the baseline.

Keywords: Government programme; Employment objective; Normal economic conditions (search for similar items in EconPapers)
JEL-codes: C11 E32 E37 E61 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2020-03-06
New Economics Papers: this item is included in nep-mac
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