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

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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.

Suggested Citation

  • José Carlos Coelho, 2020. "A new assessment of the Troika ´s economic policy for Portugal in 2012 following an Input-Output approach," Working Papers REM 2020/0121, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp01212020
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    1. João Ferreira do Amaral & João Carlos Lopes, 2016. "Self-Defeating Austerity? Assessing the Impact of Fiscal Consolidations on Unemployment," Working Papers Department of Economics 2016/13, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
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    More about this item

    Keywords

    unemployment; external deficit; budget deficit; Troika; Portugal;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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