The Italian block of the ESCB multi-country model

Elena Angelini, D‘Agostino, Antonello () and Peter McAdam ()
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D‘Agostino, Antonello: Central Bank and Financial Services Authority of Ireland, P.O. Box 559/Dame Street, Dublin 2, Ireland., http://www.centralbank.ie
Authors registered in the RePEc Author Service: Antonello D'Agostino ()

No 660, Working Paper Series from European Central Bank

Abstract: This paper documents the structure, estimation and simulation properties of the Italian block of the ESCB-multi-country model (MCM). The model is used regularly as an input into Eurosystem projection exercises and, to a lesser extent, in simulation analysis. The specification of the Italian model follows closely that of the Area-Wide Model (AWM) and indeed the other MCM country blocks (in terms of specification and accounting framework). The MCM is a quarterly estimated structural macroeconomic model that treats the economy in a relatively closed manner. It has a long-run classical equilibrium with a vertical Phillips curve but with some short-run frictions in price/wage setting and factor demands. Consequently, activity is demand-determined in the short-run but supply-determined in the longer run with employment having converged to a level consistent with an exogenously given level of equilibrium unemployment. The precise properties of the model are illustrated using a number of standard variant simulations. JEL Classification: C3, C5, E1, E2.

Keywords: Macro-econometric Modelling; Italy. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-mac
Date: 2006-07
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