HERMIN: A macroeconometric modelling framework for the EU periphery

Abstract The need to analyse the effects of EU regional policy required the construction of new models with an orientation towards the problems being experienced in the periphery. We explain the justification for, and nature of, the new modelling framework, giving a brief overview of the economies of the four objective 1 countries, focusing on issues that are particularly relevant to the targets of regional policy. We explore the implications of the stylized facts for model design in the periphery. Finally, we summarize the main common features of the HERMIN modelling approach, and illustrate where key choices need to be made in the light of national specificities.

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