Dalla sinergia tra Confindustria e la Rivista di Politica Economica nasce il progetto
Assessing Policy Reforms for Italy Using ITEM and QUEST III

Barbara Annicchiarico *,
“Tor Vergata” University, Rome

Fabio Di Dio,
Sogei S.p.A., Rome

Francesco Felici,
Italian Ministry of Economy and Finance, Rome

Francesco Nucci,
Sapienza University, Rome

This paper assesses the implications of policy reforms for the Italian economy by jointly using the Italian Treasury Econometric Model (ITEM) and QUEST III, the endogenous growth dynamic general equilibrium model of the European Commission in the version calibrated for Italy. The structural characteristics of the two models and the results of simulations are analyzed by using an array of shocks commonly examined in the evaluation of reforms. We conclude that the joint consideration of the two models can improve our understanding of how the assessment of policy interventions is likely to be affected by the uncertainty surrounding model-based evaluation.

[JEL Classification: E10; C50; E60].

Keywords: economic modelling; DGE; structural reforms; Italy.

barbara.annicchiarico@uniroma2.it, Dipartimento di Economia, Diritto e Istituzioni.
didio@sogei.it, IT Economia - Modelli di previsione ed analisi statistiche.
francesco.felici@tesoro.it, Department of the Treasury.
francesco.nucci@uniroma1.it, Dipartimento di Economia e Diritto.

We wish to thank an anonymous referee for very helpful suggestions. We gratefully acknowledge the outstanding research and technical support of Claudio Cicinelli, Andrea Cossio, Roberto Morea and Cristian Tegami of the Sogei S.p.A. macroeconomic modelling team. We are also grateful to Werner Roeger, Janos Varga and Jan in’t Veldt for sharing with us many insights about their model, QUEST III, and to Luca Correani, Francesca Di Brisco, Adele Galasso, Giuseppe Garofalo, Libero Monteforte, Ottavio Ricchi, Filippo Pericoli and participants to the 2009 Modelling Workshop in Bruxelles and to the EcoMod2010 conference for useful comments. The views expressed in the paper are those of the authors and do not necessarily reflect those of the Italian Ministry of Economy and Finance.