The Stabilizing Effects of Economic Policies in Spain in Times of COVID-19

José Boscá, Rafael Domenech, Javier Ferri, Jose Garcia and Camilo Ulloa

No eee2020-42, Studies on the Spanish Economy from FEDEA

Abstract: In this article we analyse the stabilizing role of economic policies during the COVID-19 crisis in Spain. First, we estimate the contribution of the structural shocks that explain the behaviour of the main macroeconomic aggregates during 2020, using a DSGE model estimated for the Spanish economy. Our results highlight the importance of supply and demand shocks in explaining the COVID-19 crisis. Second, we have simulated a counterfactual scenario for GDP in absence of the COVID-19 economic policy measures. According to our results, the annual fall in GDP moderates at least by 7.6 points in the most intense period of the crisis, thanks to these stabilizing policies. Finally, we have estimated the potential effects of Next Generation EU in the Spanish economy. Assuming that Spain may receive from the EU between 1.5 and 2.25 percentage points of GDP in grants and loans from 2021 to 2024, to finance mainly public investment, GDP could increase between 2 and 3 pp in 2024. All these results show the usefulness of a DSGE model like EREMS, as a practical tool for the applied economic analysis and understanding of the Spanish economy.

Date: 2020-12
New Economics Papers: this item is included in nep-dge, nep-eec and nep-eur
References: Add references at CitEc
Citations:

Downloads: (external link)
https://documentos.fedea.net/pubs/eee/eee2020-42.pdf (application/pdf)

Related works:
Journal Article: The stabilizing effects of economic policies in Spain in times of COVID-19 (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fda:fdaeee:eee2020-42

Access Statistics for this paper

More papers in Studies on the Spanish Economy from FEDEA
Bibliographic data for series maintained by Carmen Arias ().