ITFIN: A Stock-Flow Consistent Model for the Italian Economy

Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 4

96 Pages Posted: 18 Dec 2023

See all articles by Riccardo Barbieri Hermitte

Riccardo Barbieri Hermitte

Ministry of Economy and Finance, Italy

Alberto Cagnazzo

LUISS Guido Carli University, Department of Economics

Carlo A. Favero

Bocconi University - Department of Economics; Bocconi University - Department of Finance; Centre for Economic Policy Research (CEPR)

Francesco Felici

Government of the Italian Republic (Italy) - Ministry of Economy and Finance - Department of the Treasury

Valeria Macauda

Sogei S.p.A.

Francesco Nucci

University of Rome I

Cristian Tegami

Sogei S.p.A.

Date Written: May 19, 2022

Abstract

ITFIN is a quarterly, stock-ow consistent econometric model for the Italian economy developed at Italy's Department of Treasury. The model has two distinctive features: a strong focus on the financial and banking system and a emphasis on the macroeconomic consequences of sovereign risk. We model the financial position of each institutional sector in the economy with a stock-ow consistent approach to their balance sheets. In modeling both the supply and demand for many financial instruments, their prices and rates of return are derived along with a characterization of how financial stocks impinge on agents' decisions and on the pattern of non-financial variables in the economy. This paper describes the features of ITFIN by illustrating the model structure and its main equations and identities. We also describe the properties of the model by simulating the economy's response under two counterfactual scenarios on the ECB's asset purchase programmes and after three different fiscal policy shocks.

Keywords: Stock-ow consistent models, Macroeconometric models

JEL Classification: C51, E60

Suggested Citation

Barbieri Hermitte, Riccardo and Cagnazzo, Alberto and Favero, Carlo A. and Felici, Francesco and Macauda, Valeria and Nucci, Francesco and Tegami, Cristian, ITFIN: A Stock-Flow Consistent Model for the Italian Economy (May 19, 2022). Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 4, Available at SSRN: https://ssrn.com/abstract=4546700 or http://dx.doi.org/10.2139/ssrn.4546700

Riccardo Barbieri Hermitte (Contact Author)

Ministry of Economy and Finance, Italy

Alberto Cagnazzo

LUISS Guido Carli University, Department of Economics ( email )

LUISS Guido Carli University, Students
Rome
Italy

Carlo A. Favero

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

HOME PAGE: http://www.igier.unibocconi.it\favero

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Francesco Felici

Government of the Italian Republic (Italy) - Ministry of Economy and Finance - Department of the Treasury ( email )

Via XX Settembre, 97
Rome, 00187
Italy
00390647614197 (Phone)

Valeria Macauda

Sogei S.p.A. ( email )

Francesco Nucci

University of Rome I ( email )

Piazzale Aldo Moro
Rome, 00185
Italy
+39 06 4991 0847 (Phone)
+39 06 445 3246 (Fax)

Cristian Tegami

Sogei S.p.A. ( email )

Via Mario Carucci n. 99 e 85
Rome, 00143
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
32
Abstract Views
221
PlumX Metrics