.@marta_lopresto & @amit_kara use the @NIESRorg #NiGEM #Macroeconomic model to simulate the macroeconomic effect on #Italy – both 4m the current political uncertainty, & the case where 5Star-Lega form a government that enacts #FiscalStimulus, latter w the following assumptions: pic.twitter.com/52ZvqTIJ8k— Satyen Baindur (@Satyen_Baindur) June 2, 2018
Results: Year 1 - slight GDP expansion (from baseline of ~1.4%), but larger contractions (also from baseline) over the next 2 years with no real change in GDP growth rate; unemployment declines marginally Year1, but goes back up next 2 years; however #FiscalDeficit increases ~5%. pic.twitter.com/zNXIeaMNbL— Satyen Baindur (@Satyen_Baindur) June 2, 2018
The upside risk to this scenario, which the authors think unlikely, is from the coalition negotiating more fiscal space with the #EuropeanCommission (which might condition that on #StructuralReforms that boost productivity…) which might lower the investment premium etc...— Satyen Baindur (@Satyen_Baindur) June 2, 2018
