Energy prices in the Bank of Italy macroeconometric model

Pietro Cova (), Davide Fantino () and Lisa Rodano ()
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Pietro Cova: Bank of Italy
Davide Fantino: Bank of Italy
Lisa Rodano: Bank of Italy

No 942, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The sharp increases in energy commodity prices, and in particular in natural gas prices, in 2021 and 2022 led to a notable surge in inflation in Italy and the euro area. We extend the Bank of Italy's quarterly econometric model (BIQM) to adequately capture the direct and indirect inflationary and macroeconomic effects of the extraordinary increases in energy prices, modelling gas and oil prices separately. We assess the forecasting properties of the model and also evaluate the impact of the measures taken by governments to counter the macroeconomic consequences of the energy crisis.

Keywords: macro-econometric models; Italy; forecasting; policy simulation (search for similar items in EconPapers)
JEL-codes: C30 E10 E17 (search for similar items in EconPapers)
Date: 2025-06
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_942_25

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