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- Title
An evaluation of the performance of an applied general equilibrium model of the Spanish economy.
- Authors
Kehoe, Timothy J.; Polo, Clemente; Sancho, Ferran
- Abstract
In 1985-86 the authors were members of a team that constructed a static applied general equilibrium model that was used to analyze the impact on the Spanish economy of the 1986 fiscal reform, which accompanied Spain's entry into the European Community. This paper compares the results obtained to recently published data for 1985-87; we find that the model performed well in predicting the changes in relative prices and resource allocation that actually occurred, particularly if we incorporate exogenous shocks that affected the Spanish economy in 1986. We also analyze the sensitivity of the results to alternative specifications of the labor market and macroeconomic closure rules; we find that the central results are robust.
- Subjects
SPAIN; ECONOMIC equilibrium; SPANISH economy; FISCAL policy; MACROECONOMICS; RESOURCE allocation; LABOR market
- Publication
Economic Theory, 1995, Vol 6, Issue 1, p115
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/BF01213943