Publications

This paper delivers the first comprehensive estimate of the dynamic fiscal multiplier of defence spending for the EU-27 by exploiting exogenous accrual-based government defence outlays and a combination of linear and non-linear Local Projection methods.

The impact of tariffs is computed through the calculation of effective tariffs under different scenarios and simulations based on distinct methodologies. If the current tariffs remain broadly unchanged, global growth could initially fall between 0.2pp and 0.5pp, and potentially more over the medium term.

NGFS’s new five-year climate scenarios help gauge near-term transition and physical risks, adding compound-hazard modelling and macro-financial feedbacks, but they retain some outdated narratives and overlook recent policy decoupling, limiting realism.

This note proposes a framework to estimate the employment effects of floods in Spain, combining imputed damage data with a spatial panel model. These extreme events cause job losses and regional spillovers, but timely aid mitigates them. The DANA in Valencia illustrates the frameworks' accuracy and its policy relevance.

Overall, the past year has been positive in terms of the evolution of macroeconomic, fiscal and financial vulnerabilities in most countries globally.

This Observatory evaluates the factors explaining the cyclical behavior of GDP and private consumption in Spain up to Q2 2024. It analyzes the supply and demand factors behind the GDP per working-age person (PET) gap of -1.3 pp from its trend level and the weaker performance of consumption compared to pre-pandemic levels.

Countries that expand their climate policy portfolio exhibit higher climate change mitigation patent filings, low carbon technology trade flows, and green foreign direct investment flows. The coordination and cooperation of international policies is also relevant, showcasing evidence of potential climate policy spillovers.

The increasing development of short-term climate scenarios is driven by enhanced supervisory expectation for a comprehensive understanding of the effects of climate change. Their design is a work in progress blending narratives, shocks and modeling tools.