The Macroeconomics of Europe 2020 Reform Strategy and the Potential Effects on the Italian Economy
AbstractThis paper studies the potential effects on the Italian economy of various reform packages in the spirit of the Europe 2020 strategy. Using the European Commission’s model QUEST III with R&D calibrated to match important features of the Italian economy, we provide a quantitative assessment of the possible effects in terms of growth, employment, sustainability of public finances and external imbalances of several knowledge-oriented, labor and product market reforms. We observe that labor market reforms are likely to bring about sizable long-run gains in output and employment and that most of these gains accrue to low skilled workers, while real wages tend to increase especially for high skilled workers. Some interventions are likely to have some transitional costs as they give rise to a temporary decline in consumption and/or employment, but the simultaneous implementation of all reforms may tend to mitigate these effects already in the medium run. As a result of higher growth, in the no costly reform scenarios, the public debt-to-GDP ratio declines substantially. However, the analysis shows that non-budget neutral structural reforms may have considerable side effects on the external imbalances.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of the Treasury, Ministry of the Economy and of Finance in its series Working Papers with number 8.
Date of creation:
Date of revision:
Europe 2020; Structural Reforms; Simulation Analysis; Italy;
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013.
"Structural reforms and the potential effects on the Italian economy,"
Journal of Policy Modeling,
Elsevier, vol. 35(1), pages 88-109.
- Barbara Annicchiarico & Fabio Di Dio & Francesco Felici, 2012. "Structural Reforms and the Potential Effects on the Italian Economy," CEIS Research Paper 227, Tor Vergata University, CEIS, revised 29 Mar 2012.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marina Sabatini).
If references are entirely missing, you can add them using this form.