JOINT RESEARCH CENTRE - SEVILLE - Use of EUROMOD in the Report on Public Finances in EMU

The Report on Public Finances in EMU 2022, one of the flagship publications of DG ECFIN, was published on 25 October. EUROMOD was used to illustrate the short-term budgetary impact of the inflation shock seen in 2022 across EU countries, in a situation in which this shock translates into wage increases.

date: 08/11/2023

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EUROMOD can be used to account for fiscal drag and benefit erosion, two key channels via which inflation can affect budgetary outcomes. Simulation results point at a favourable and differentiated impact on the budget balance, ranging from 0.5 to 1.5 percent of GDP across EU countries.

The whole report is available here.