IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v132y2024ics0264999324000257.html
   My bibliography  Save this article

On the macroeconomic impact of NGEU funds and its propagation through the production network

Author

Listed:
  • Fernández-Cerezo, Alejandro
  • Moral-Benito, Enrique
  • Quintana, Javier

Abstract

We quantify the sectoral and aggregate effects of the Next Generation European Union program in the Spanish economy. We outline a dynamic model with production and investment networks that allows for different linkages among sectors and countries. Our model can accommodate different stimulus packages, such as public infrastructure investment, current public expenditure, or capital transfers to firms. Considering the amplification effects through the production network, the average impact on gross domestic product over a five-year horizon is estimated to be 1.75% per year, about 0.6% larger than the direct impact estimated without network interactions. Our model also identifies potential threats, such as the emergence of bottlenecks, inflationary pressures from public spending, or shortages of high-skilled workers in certain sectors, that could significantly reduce the program’s positive impact.

Suggested Citation

  • Fernández-Cerezo, Alejandro & Moral-Benito, Enrique & Quintana, Javier, 2024. "On the macroeconomic impact of NGEU funds and its propagation through the production network," Economic Modelling, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:ecmode:v:132:y:2024:i:c:s0264999324000257
    DOI: 10.1016/j.econmod.2024.106669
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999324000257
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2024.106669?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Input–Output Models; Industrial Policy; Public Investment; Next Generation European Union;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:132:y:2024:i:c:s0264999324000257. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.