Economic policy: simulation exercises

With a simulation software, the students introduce economic policy changes into the model at the level of the adequate instruments (personal income tax, corporate tax, VAT, social contributions, public employment, ...) and analyse the relations between the variables that are affected by the changes. The variable values at the start make up the baseline projection which is used to measure the effects. After analysing the effects, the attention is focused on the policy mix to be designed. To achieve some goals within a baseline macroeconomic scenario, a combination of measures has to be chosen.