The Multisector Applied Computable General Equilibrium Model for Italian economy (MACGEM-IT)

The continuous evolution of the institutional and regulatory framework requires the development of analysis instruments able to support the policy maker in designing and evaluating the impact of specific policy measures for the achievement of selected targets. With this intent, the MACGEM-IT model is developed to measure the aggregate and disaggregated, direct and indirect impacts of economic policy proposals within the economic system. Specifically built to reflect the characteristics of Italian economy, MACGEM-IT is a multi-input, multi-output and multi-sector static CGE model calibrated on the Social Accounting Matrix for Italy. It incorporates rigidities on prices, market imperfections and specific constraints on the behaviour of selected institutional sectors. The capability of the model to track the transmission mechanisms of policy measures and identify their direct, indirect and induced effects in the economy, is tested through a set of fiscal policy simulations.