Using a macromodel to examine policy alternatives : Some Finnish results
Virén, Matti; Lahti, Ari (01.12.1987)
Numero
14/87Julkaisija
Bank of Finland
1987
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2023070373836Tiivistelmä
This paper focuses on the question of how to design policies which would help a small open economy to improve its growth potential. To this end, the effects of several policy instruments are evaluated using the QMED model of the Bank of Finland as an analytical framework. Special emphasis is placed on supply-side effects, which include both relative price effects and (endogenous) capacity effects. The policy simulations suggest that well-designed economic policies would indeed pay off in the form of improvements in competitiveness and productive capacity.