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The Italian Treasury Econometric Model (ITEM)

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  • Cicinelli, Claudio
  • Cossio, Andrea
  • Nucci, Francesco
  • Ricchi, Ottavio
  • Tegami, Cristian

Abstract

In this paper, we provide a description of the Italian Treasury Econometric Model (ITEM). We illustrate its general structure and model properties, especially with regard to the economy's response to changes in policy and in other dimensions of the economic environment. One of the key features of the model is the joint representation of the economy on both the demand and the supply sides. Since it is designed for the needs of a Treasury Department, its public finance section is developed in great detail, both on the expenditure and revenue sides. It also features a complete modeling of financial assets and liabilities of each institutional sector. After documenting the model structure and the estimation results, we turn to the outcomes of model simulation and ascertain the model properties. In ITEM the shocks that generate permanent effects on output are associated with: a) variables that affect the tax wedge in the labor market and the user cost of capital; b) labor supply change; and c) variation in the trend component of TFP (technical progress). By contrast, demand shocks have only temporary effects on output.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 1 (January)
Pages: 125-133

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Handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:125-133

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Macroeconometric models Economic policy;

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Cited by:
  1. Barbara Annicchiarico & Fabio Di Dio & Francesco Felici & Francesco Nucci, . "Macroeconomic Modelling and the Effects of Policy Reforms: an Assessment for Italy using ITEM and," Working Papers 1, Department of the Treasury, Ministry of the Economy and of Finance.
  2. Barbara Annicchiarico & Fabio Di Dio & Francesco Felici & Francesco Nucci, 2013. "Assessing policy reforms for Italy using ITEM and QUESTIII," CEIS Research Paper 280, Tor Vergata University, CEIS, revised 17 May 2013.
  3. Stefania P. S. Rossi & Guido Pellegrini & Ornella Tarola, 2006. "Macroeconometric modelling for evaluationg the policy impact on growth in dualistic countries: the case of Southern Italian Regions," Vienna Economics Papers 0607, University of Vienna, Department of Economics.

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