IDEAS home Printed from https://ideas.repec.org/p/itt/wpaper/2014-7.html
   My bibliography  Save this paper

ORANI-IT: a computable general equilibrium model of Italy

Author

Listed:
  • Francesco Felici
  • Maria Gesualdo

Abstract

This paper presents the comparative-static national disaggregate Computable General Equilibrium (CGE) model of the Italian economy, ORANI-IT, which represents the starting point to the development of a tax CGE model of Italy. The model, designed at the Department of Treasury of the Italian Ministry of the Economy and Finance, in collaboration with the Centre of Policy Studies (CoPS), and currently managed at Sogei S.p.A. (IT Economia - Modelli di Previsione ed Analisi Statistiche), is intended for policy analysis. The aim of this paper is to provide a complete description of the theoretical specification of the model and to illustrate the process of compiling the model�s database. Departing from the core structure, features of the Italian model in the context of ORANI-style models, developed at CoPS, are highlighted, as data availability allowed us to improve the modelling of the investment matrix and the demand of labour. The result is a more reliable model with a broader level of analysis. The paper concludes with the model�s validation, which among several checks, consists in an illustrative two targets/two instruments simulation.

Suggested Citation

  • Francesco Felici & Maria Gesualdo, 2014. "ORANI-IT: a computable general equilibrium model of Italy," Working Papers 7, Department of the Treasury, Ministry of the Economy and of Finance.
    • Handle: RePEc:itt:wpaper:2014-7
    as

    Download full text from publisher

    File URL: http://www.dt.tesoro.it/export/sites/sitodt/modules/documenti_it/analisi_progammazione/working_papers/WP_N_7_-_2014.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 2000. "Decomposing Simulation Results with Respect to Exogenous Shocks," Computational Economics, Springer;Society for Computational Economics, vol. 15(3), pages 227-249, June.
    2. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    3. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 74-79, January.
    4. Herbert E. Scarf, 1967. "The Approximation of Fixed Points of a Continuous Mapping," Cowles Foundation Discussion Papers 216R, Cowles Foundation for Research in Economics, Yale University.
    5. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, number 9780226036335, April.
    6. John B. Shoven & John Whalley, 1973. "General Equilibrium with Taxes: A Computational Procedure and an Existence Proof," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(4), pages 475-489.
    7. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5, National Bureau of Economic Research, Inc.
    8. van der Werf, Edwin, 2008. "Production functions for climate policy modeling: An empirical analysis," Energy Economics, Elsevier, vol. 30(6), pages 2964-2979, November.
    9. Barbara Annicchiarico & Fabio Di Dio & Francesco Felici & Libero Monteforte, 2013. "IGEM: a Dynamic General Equilibrium Model for Italy," Working Papers 4, Department of the Treasury, Ministry of the Economy and of Finance.
    10. Maurizio Ciaschini & Claudio Socci, 2007. "Bi†Regional Sam Linkages: A Modified Backward And Forward Dispersion Approach," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 19(3), pages 233-254, November.
    11. Dixon, Peter B. & Rimmer, Maureen T., 2013. "Validation in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1271-1330, Elsevier.
    12. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 112-117, January.
    13. Charles L. Ballard & John Karl Scholz & John B. Shoven, 1987. "The Value-Added Tax: A General Equilibrium Look at Its Efficiency and Incidence," NBER Chapters, in: The Effects of Taxation on Capital Accumulation, pages 445-480, National Bureau of Economic Research, Inc.
    14. Fabio FIORILLO & Claudio SOCCI, 2002. "Quale politica fiscale regionale? Analisi del federalismo italiano attraverso un modello CGE," Working Papers 178, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    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. Felici Francesco & Maria Gesualdo, 2014. "Fiscal extension to ORANI-IT: a computable general equilibrium model for Italy," Working Papers 8, Department of the Treasury, Ministry of the Economy and of Finance.
    2. Alarudeen Aminu, 2019. "A recursive dynamic computable general equilibrium analysis of value-added tax policy options for Nigeria," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-38, December.

    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. World Bank, 2001. "Mexico Energy Environment Review," World Bank Publications - Reports 20297, The World Bank Group.
    2. Engen, Eric M. & Skinner, Jonathan, 1996. "Taxation and Economic Growth," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 617-642, December.
    3. Fehr, Hans, 1999. "Welfare Effects of Dynamic Tax Reforms," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 5, number urn:isbn:9783161470165, September.
    4. Keshab Raj Bhattarai, 2007. "Capital Accumulation, Growth and Redistribution: General Equilibrium Impacts of Energy and Pollution Taxes in UK," Energy and Environmental Modeling 2007 24000005, EcoMod.
    5. Pizer, William A. & Burtraw, Dallas & Harrington, Winston & Newell, Richard G. & Sanchirico, James N., 2005. "Modeling Economywide versus Sectoral Climate Policies Using Combined Aggregate-Sectoral Models," Discussion Papers 10502, Resources for the Future.
    6. Zabinski, Daniel & Selden, Thomas M. & Moeller, John F. & Banthin, Jessica S., 1999. "Medical savings accounts: microsimulation results from a model with adverse selection," Journal of Health Economics, Elsevier, vol. 18(2), pages 195-218, April.
    7. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    8. Engel, Eduardo M. R. A. & Galetovic, Alexander & Raddatz, Claudio E., 1999. "Taxes and income distribution in Chile: some unpleasant redistributive arithmetic," Journal of Development Economics, Elsevier, vol. 59(1), pages 155-192, June.
    9. Robinson, Sherman & Yunez-Naude, Antonio & Hinojosa-Ojeda, Raul & Lewis, Jeffrey D. & Devarajan, Shantayanan, 1999. "From stylized to applied models:: Building multisector CGE models for policy analysis," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 5-38.
    10. Leslie E. Papke, 1993. "What Do We Know about Enterprise Zones?," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 37-72, National Bureau of Economic Research, Inc.
    11. Robert S. Chirinko & Steven M. Fazzari & Andrew P. Meyer, 2004. "That Elusive Elasticity: A Long-Panel Approach to Estimating the Capital-Labor Substitution Elasticity," CESifo Working Paper Series 1240, CESifo.
    12. Boeters, Stefan & Savard, Luc, 2011. "The labour market in CGE models," ZEW Discussion Papers 11-079, ZEW - Leibniz Centre for European Economic Research.
    13. Don Fullerton & Yolanda Kodrzycki Henderson, 1987. "The Impact of Fundamental Tax Reform on the Allocation of Resources," NBER Chapters, in: The Effects of Taxation on Capital Accumulation, pages 401-444, National Bureau of Economic Research, Inc.
    14. Bohringer, Christoph & Boeters, Stefan & Feil, Michael, 2005. "Taxation and unemployment: an applied general equilibrium approach," Economic Modelling, Elsevier, vol. 22(1), pages 81-108, January.
    15. Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-6, University of Cologne, FiFo Institute for Public Economics.
    16. M. Alejandro Cardenete & Ferran Sancho, 2002. "Sensitivity of Simulation Results to Competing SAM Updates," UFAE and IAE Working Papers 556.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    17. Robert S. Chirinko & Steven M. Fazzari & Andrew P. Meyer, 2002. "That Elusive Elasticity: A Long-Panel Approach To Estimating The Price Sensitivity Of Business Capital," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B3-1, International Conferences on Panel Data.
    18. Pablo D Fajgelbaum & Eduardo Morales & Juan Carlos Suárez Serrato & Owen Zidar, 2019. "State Taxes and Spatial Misallocation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 333-376.
    19. Fullerton, Don & Henderson, Yolanda Kodrzycki, 1989. "A Disaggregate Equilibrium Model of the Tax Distortions among Assets, Sectors, and Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 391-413, May.
    20. Arntz, Melanie & Boeters, Stefan & Gurtzgen, Nicole, 2006. "Alternative approaches to discrete working time choice in an AGE framework," Economic Modelling, Elsevier, vol. 23(6), pages 1008-1032, December.

    More about this item

    Keywords

    Computable general equilibrium (CGE) model; model's validation; Italy;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:itt:wpaper:2014-7. 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: Michele Petrocelli (email available below). General contact details of provider: https://edirc.repec.org/data/tesgvit.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.