The macroeconomic effects of the CSF 1994-1999 in the EU periphery. An analysis based on the HERMIN model

This paper tries to assess the macroeconomic effects of the Community Support Framework (CSF) for the period 1994-1999 in the peripheral countries of the European Union (Ireland, Portugal and Spain) using the HERMIN model. To that end, after providing an overview of the CSF in each country and analysing their main programmes, we offer a detailed description of the macroeconomic methodology used to explore the quantification of the effects of those CSF programmes. Three main programmes are considered: physical infrastructure, human resources and aids to production and investment. The contribution to growth by these programmes, both separately and jointly, is analysed and compared with a stylized projection of the peripheral economies used as a baseline. In order to treat supply shocks, the HERMIN model of the peripheral economies of the EU is correspondingly adapted in a first attempt to use a macroeconometric model for the analysis of those effects.