Assessing the Macroeconomic Impact of Structural Reforms The Case of Italy

Lusine Lusinyan and Dirk Muir

No 2013/022, IMF Working Papers from International Monetary Fund

Abstract: Wide-ranging structural reforms are underway in Italy, aimed at addressing key bottlenecks in the product and labor markets. Our analysis, based on the IMF‘s Global Integrated Monetary and Fiscal model (GIMF), attempts to quantify the potential gains to the economy from a comprehensive package of structural reforms. We find that these gains can be sizeable. While in most cases, the reforms go in the right direction, their impact would depend on effective and timely implementation. In some areas, especially in the labor market, reforms would benefit from further strengthening. The priorities should be to strengthen competition in the non-tradable sector and make the labor market more efficient and inclusive, supported by growth-friendly fiscal reforms.

Keywords: WP; labor market reform; labor market; product market; firm; product market reform; Growth; structural reforms; product market competition; labor market reforms; fiscal policy; macroeconomic policy coordination; dynamic stochastic general equilibrium models; Italy; reform measure; expenditure switching; reforms in Italy; wage markup; labor market reform bill; labor market rigidity; unit labor cost; regulation indicator; B. labor market; A. product markets; price markup; labor market reform measure; Commodity markets; Labor markets; Wages; Global; Europe (search for similar items in EconPapers)
Pages: 59
Date: 2013-01-24
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Citations: View citations in EconPapers (33)

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