[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2013-022.html
   My bibliography  Save this paper

Assessing the Macroeconomic Impact of Structural Reforms The Case of Italy

Author

Listed:
  • Ms. Lusine Lusinyan
  • Mr. Dirk V Muir
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.

Suggested Citation

  • Ms. Lusine Lusinyan & Mr. Dirk V Muir, 2013. "Assessing the Macroeconomic Impact of Structural Reforms The Case of Italy," IMF Working Papers 2013/022, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/022
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=40272
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alexandr Hobza & Gilles Mourre, 2010. "Quantifying the potential macroeconomic effects of the Europe 2020 strategy: stylised scenarios," European Economy - Economic Papers 2008 - 2015 424, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. FRANCESCO FELICI & Barbara Annicchiarico & Fabio Di Dio, 2012. "Structural Reforms and the Potential Effects on the Italian Economy," EcoMod2012 5073, EcoMod.
    3. Sebastian Barnes & Romain Bouis & Philippe Briard & Sean Dougherty & Mehmet Eris, 2013. "The GDP Impact of Reform: A Simple Simulation Framework," OECD Economics Department Working Papers 834, OECD Publishing.
    4. Jesus Felipe & Utsav Kumar, 2014. "Unit labor costs in the eurozone: the competitiveness debate again," Review of Keynesian Economics, Edward Elgar Publishing, vol. 2(4), pages 490-507, October.
    5. Sandra Gomes & Pascal Jacquinot & Matthias Mohr & Massimiliano Pisani, 2013. "Structural Reforms and Macroeconomic Performance in the Euro Area Countries: A Model-Based Assessment," International Finance, Wiley Blackwell, vol. 16(1), pages 23-44, February.
    6. Günter Coenen & Christopher J. Erceg & Charles Freedman & Davide Furceri & Michael Kumhof & René Lalonde & Douglas Laxton & Jesper Lindé & Annabelle Mourougane & Dirk Muir & Susanna Mursula & Carlos d, 2012. "Effects of Fiscal Stimulus in Structural Models," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 22-68, January.
    7. John Martin & Stefano Scarpetta, 2012. "Setting It Right: Employment Protection, Labour Reallocation and Productivity," De Economist, Springer, vol. 160(2), pages 89-116, June.
    8. Rebekka Christopoulou & Philip Vermeulen, 2012. "Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors," Empirical Economics, Springer, vol. 42(1), pages 53-77, February.
    9. Rachel Griffith & Rupert Harisson, 2004. "The link between product market reform and macro-economic performance," European Economy - Economic Papers 2008 - 2015 209, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    10. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
    11. Romain Bouis & Orsetta Causa & Lilas Demmou & Romain Duval & Aleksandra Zdzienicka, 2012. "The Short-Term Effects of Structural Reforms: An Empirical Analysis," OECD Economics Department Working Papers 949, OECD Publishing.
    12. Nathalie Girouard & Christophe André, 2005. "Measuring Cyclically-adjusted Budget Balances for OECD Countries," OECD Economics Department Working Papers 434, OECD Publishing.
    13. Matteo Cacciatore & Romain Duval & Giuseppe Fiori, 2012. "Short-Term Gain or Pain? A DSGE Model-Based Analysis of the Short-Term Effects of Structural Reforms in Labour and Product Markets," OECD Economics Department Working Papers 948, OECD Publishing.
    14. Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013. "Structural reforms and the potential effects on the Italian economy," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 88-109.
    15. Forni, L. & Gerali, A. & Pisani, M., 2010. "Macroeconomic Effects Of Greater Competition In The Service Sector: The Case Of Italy," Macroeconomic Dynamics, Cambridge University Press, vol. 14(5), pages 677-708, November.
    16. Romain Bouis & Romain Duval, 2011. "Raising Potential Growth After the Crisis: A Quantitative Assessment of the Potential Gains from Various Structural Reforms in the OECD Area and Beyond," OECD Economics Department Working Papers 835, OECD Publishing.
    17. Luc Everaert & Werner Schule, 2008. "Why It Pays to Synchronize Structural Reforms in the Euro Area Across Markets and Countries," IMF Staff Papers, Palgrave Macmillan, vol. 55(2), pages 356-366, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Barbara Annicchiarico & Fabio Dio & Francesco Felici, 2015. "Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy," Open Economies Review, Springer, vol. 26(4), pages 731-785, September.
    2. Antonio Bassanetti & Matteo Bugamelli & Sandro Momigliano & Roberto Sabbatini & Francesco Zollino, 2014. "The policy response to macroeconomic and fiscal imbalances in Italy in the last fifteen years," PSL Quarterly Review, Economia civile, vol. 67(268), pages 55-103.
    3. Michal Andrle & Mr. Alvar Kangur & Mr. Mehdi Raissi, 2018. "Italy: Quantifying the Benefits of a Comprehensive Reform Package," IMF Working Papers 2018/060, International Monetary Fund.
    4. Andrea Gerali & Alberto Locarno & Alessandro Notarpietro & Massimiliano Pisani, 2015. "Every cloud has a silver lining. The sovereign crisis and Italian potential output," Temi di discussione (Economic working papers) 1010, Bank of Italy, Economic Research and International Relations Area.
    5. Matthes, Jürgen, 2015. "Strukturreformen der Krisenländer: Bestandsaufnahme und Abschätzung der Relevanz für Wachstum und Währungsraum," IW policy papers 5/2015, Institut der deutschen Wirtschaft (IW) / German Economic Institute.
    6. Mariana Colacelli & Emilio Fernández Corugedo, 2018. "Macroeconomic Effects of Japan’s Demographics: Can Structural Reforms Reverse Them?," IMF Working Papers 2018/248, International Monetary Fund.
    7. Janos Varga & Werner Roeger & Jan in’t Veld, 2014. "Growth effects of structural reforms in Southern Europe: the case of Greece, Italy, Spain and Portugal," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(2), pages 323-363, May.
    8. Borislava Mircheva & Mr. Dirk V Muir, 2015. "Spillovers in the Nordic Countries," IMF Working Papers 2015/070, International Monetary Fund.
    9. Sara Calligaris & Massimo Del Gatto & Fadi Hassan & Gianmarco I P Ottaviano & Fabiano Schivardi & Tommaso MonacelliManaging Editor, 2018. "The productivity puzzle and misallocation: an Italian perspective," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(96), pages 635-684.
    10. Mr. Alvar Kangur, 2018. "Competitiveness and Wage Bargaining Reform in Italy," IMF Working Papers 2018/061, International Monetary Fund.
    11. International Monetary Fund, 2015. "Finland: Selected Issues," IMF Staff Country Reports 2015/312, International Monetary Fund.
    12. Emanuela Ciapanna & Sauro Mocetti & Alessandro Notarpietro, 2020. "The effects of structural reforms: Evidence from Italy," Temi di discussione (Economic working papers) 1303, Bank of Italy, Economic Research and International Relations Area.
    13. Nazim Belhocine & Mr. Daniel Garcia-Macia, 2020. "Identifying Service Market Reform Priorities in Italy," IMF Working Papers 2020/039, International Monetary Fund.
    14. Ana Gouveia & Sílvia Santos & Inês Gonçalves, 2017. "The short-term impact of structural reforms on productivity growth: beyond direct effects," GEE Papers 0065, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2017.
    15. Marilene Lorizio & Antonia Rosa Gurrieri, 2017. "Resilient Smes, Institutions And Justice. Evidence In Italy," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 20, pages 131-155, December.
    16. Michele Catalano & Emilia Pezzolla, 2015. "The interaction between the labour tax wedge and structural reforms in Italy," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 185-223.
    17. Maurizio Zenezini, 2013. "Riforme e crescita in Italia: una nota," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 97-113.
    18. Barbara Annichiarico & Fabio Di Dio & Francesco Felici, 2016. "IGEM II: a New Variant of the Italian General Equilibrium Model," Working Papers 4, Department of the Treasury, Ministry of the Economy and of Finance.
    19. Barbara Annicchiarico, Fabio Di Dio, Francesco Felici, 2013. "Pro-Competitive Reforms And Timing Of Implementation: An Igem-Based Simulation Analysis For Italy," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 67(2), pages 155-170, April-Jun.
    20. Pfeiffer, Philipp & Varga, Janos & in 't Veld, Jan, 2024. "Unleashing potential: Model-based reform benchmarking for EU Member States," European Journal of Political Economy, Elsevier, vol. 83(C).
    21. Gerali, Andrea & Locarno, Alberto & Notarpietro, Alessandro & Pisani, Massimiliano, 2018. "The sovereign crisis and Italy’s potential output," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 418-433.
    22. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D�Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo , 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
    23. Brian Micallef, 2017. "A Sectoral Supply-Side Model to Assess the Impact of Labour Market Reforms in Malta," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(4), pages 105-118, April.
    24. Marika Santoro, 2015. "Long-term Gain, Short-Term Pain: Assessing the Potential Impact of Structural Reforms in Chile," IMF Working Papers 2015/282, International Monetary Fund.
    25. Andrea Gerali & Alessandro Notarpietro & Massimiliano Pisani, 2014. "Macroeconomic effects of simultaneous implementation of reforms after the crisis," Temi di discussione (Economic working papers) 997, Bank of Italy, Economic Research and International Relations Area.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michele Catalano & Emilia Pezzolla, 2015. "The interaction between the labour tax wedge and structural reforms in Italy," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 185-223.
    2. Miss Anna R Bordon & Mr. Christian H Ebeke & Ms. Kazuko Shirono, 2016. "When Do Structural Reforms Work? On the Role of the Business Cycle and Macroeconomic Policies," IMF Working Papers 2016/062, International Monetary Fund.
    3. Anderson, Derek & Hunt, Benjamin & Snudden, Stephen, 2014. "Fiscal consolidation in the euro area: How much pain can structural reforms ease?," Journal of Policy Modeling, Elsevier, vol. 36(5), pages 785-799.
    4. Martina Basarac Sertic & Anita Ceh Casni & Valentina Vuckovic, 2015. "Impact of labour market reforms on economic activity in European Union: short term costs and long term benefits," Financial Theory and Practice, Institute of Public Finance, vol. 39(1), pages 83-107.
    5. Gomes, Sandra, 2018. "Euro area structural reforms in times of a global crisis," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 28-45.
    6. Aida Caldera Sánchez & Alain de Serres & Naomitsu Yashiro, 2017. "Reforming in a Difficult Macroeconomic Context: A Review of Issues and Recent Literature," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-41, February.
    7. Emanuela Ciapanna & Sauro Mocetti & Alessandro Notarpietro, 2020. "The effects of structural reforms: Evidence from Italy," Temi di discussione (Economic working papers) 1303, Bank of Italy, Economic Research and International Relations Area.
    8. FRANCESCO FELICI & Barbara Annicchiarico & Fabio Di Dio, 2012. "Structural Reforms and the Potential Effects on the Italian Economy," EcoMod2012 5073, EcoMod.
    9. Ana Fontoura Gouveia & Gustavo Monteiro & Sílvia Fonte Santa, 2019. "Product Markets’ Deregulation: A more Productive, more Effcient and more Resilient Economy?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 230(3), pages 125-155, September.
    10. repec:ecb:ecbops:2014165 is not listed on IDEAS
    11. Romain Bouis & Mr. Romain A Duval & Johannes Eugster, 2016. "Product Market Deregulation and Growth: New Country-Industry-Level Evidence," IMF Working Papers 2016/114, International Monetary Fund.
    12. Daragh Clancy & Rossana Merola, 2016. "ÉIRE Mod: A DSGE Model for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 47(1), pages 1-31.
    13. Ana Gouveia & Sílvia Santos & Inês Gonçalves, 2017. "The short-term impact of structural reforms on productivity growth: beyond direct effects," GEE Papers 0065, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2017.
    14. Campos, Nauro F. & Eichenauer, Vera Z. & Sturm, Jan-Egbert, 2020. "Close encounters of the European kind: Economic integration, sectoral heterogeneity and structural reforms," European Economic Review, Elsevier, vol. 129(C).
    15. Campagne, Benoît & Poissonnier, Aurélien, 2018. "Structural reforms in DSGE models: Output gains but welfare losses," Economic Modelling, Elsevier, vol. 75(C), pages 397-421.
    16. Nazim Belhocine & Mr. Daniel Garcia-Macia, 2020. "Identifying Service Market Reform Priorities in Italy," IMF Working Papers 2020/039, International Monetary Fund.
    17. Vogel, Lukas, 2017. "Structural reforms at the zero bound," European Journal of Political Economy, Elsevier, vol. 48(C), pages 74-90.
    18. Cacciatore, Matteo & Duval, Romain & Fiori, Giuseppe & Ghironi, Fabio, 2016. "Short-term pain for long-term gain: Market deregulation and monetary policy in small open economies," Journal of International Money and Finance, Elsevier, vol. 68(C), pages 358-385.
    19. Bofinger, Peter & Schnabel, Isabel & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2015. "Zukunftsfähigkeit in den Mittelpunkt. Jahresgutachten 2015/16 [Focus on Future Viability. Annual Report 2015/16]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201516, February.
    20. Romain Duval & Davide Furceri, 2018. "The Effects of Labor and Product Market Reforms: The Role of Macroeconomic Conditions and Policies," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(1), pages 31-69, March.
    21. Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013. "Structural reforms and the potential effects on the Italian economy," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 88-109.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2013/022. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.