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This study on the macroeconomic effects of fiscal devaluation analyzes the outcomes of a cut in employers’ social security contributions and increase in VAT rate. The aim of the policy is to correct external imbalances and to boost growth, employment and competitiveness. The outcomes of the measure are simulated using the multi-country macroeconomic model Nigem, provided by the National Institute of Economic and Social Research. The study is performed within a framework contract between European Commission and a research consortium in which ETLA belongs.
The study is carried out by Kari Alho, Jukka Lassila, Niku Määttänen, Paavo Suni ja Tarmo Valkonen and it ends in November 2012.
