Publication

This study examines the effect Catalonia seceding from Spain could have on the region's economic development as well as its relations with Madrid and the EU. The authors present two scenarios: one in which Catalonia secedes following a mutual agreement with Madrid and the other in which it leaves as a result of a unilateral decision. Both scenarios, they argue, would result in uncertainty, high interest rates and a volatile investment environment as well as a slowdown in the Catalan GDP growth rate in the short term. However, they also contend that the Catalan economy could see improved economic and employment growth rates following independence over the long term and that the region would benefit more under a mutually agreed secession as the reduced uncertainties and risks associated with secession allow for a faster economic recovery.