Macro-economic Scenarios of Catalonia’s Development in horizon 2030
This study focused on the quantification of the economic implications for the Catalan region in the case Catalonia becomes an independent state. This was quite a challenging task, as such a decision would trigger a long chain of events, marked by high uncertainty. Hence caution has been taken in formulating certain plausible scenarios that allowed the capturing of some of the most important mechanisms in the adjustment process of Catalonia towards an independent state. Three scenarios quantified: a) a scenario in which Catalonia remains an integrated region of Spain and the fiscal imbalances with the Spanish Central Administration remain, b) a mutual agreement scenario, in which negotiations are successful and Catalonia secedes from Spain, agreeing to undertake 20% of Spanish debt and c) a unilateral secession scenario in which negotiations fail and Catalonia secedes from Spain, undertaking to service 12% of Spanish debt. Different interest rates and transition periods were assumed to prevail in each secession scenario, reflecting the different degree of underlying uncertainty. The case where negotiations would lead to extra fiscal autonomy within Spain has not been examined. The scenarios have been quantified with the use of an applied computable General Equilibrium model, further developed and calibrated so as to include Catalonia as a separate region.