A convenient policy control through the Macro Multiplier Approach

In this paper an attempt is made to identify a ”convenient” structure of a policy variable, final demand control, through the use of a multi-sectoral model. The method used relies on a specific spectral ecomposition which allows for the quantification of the scale-effect of each structure that the policy variable can assume on the structures of the objective ariable. This quantification is of aggregated type since the scalars obtained are valid for all sectoral components of both the policy variable and the objective variable. What is more relevant they are consistent with the multi-sectoral feature of the model, overcoming the objections put forward by the theory of aggregation. In fact the aggregation theory states that if we aggregate sectors we obtain a new model with different structural properties, while, in our case, the aggregated scalar that we obtain for each structure is perfectly consistent with the original model. We call these scalars Macroeconomic Multipliers since they say how many time the modulus of the multi-sectoral policy variable is multiplied when we compare it with the modulus of the effects observed on the multi-sectoral objective variable. Once identified the structures and the associated Macro Multipliers, the policy maker can have a complete picture of the economic structure of the objective variables that can be attained and determine a ”convenient” structure of the policy variable choosing either one structure or a combination of the structures identified.IO model,Structural Change,Multipliers Analysis

Balance, Manhattan norm and Euclidean distance of industrial policies for the US

The design of policy controls oriented to stimulate specific industrial activities highlights a set of problems that involve the choice of the macro variables that make up the policy control, the determination of their aggregate amount as well as their sectoral composition and their inner balance. In a multi-sectoral framework these issues require a careful identification of the relationship between the scale (aggregate value) and structure (inner composition) of both the policy control and policy target. The Macro Multiplier approach identifies the complete set of aggregate scalars that are hidden within the complexity of the multi industry relations and how they are strictly linked with predetermined structures both of the policy control and of the policy target. The application exercise is performed on an Input\u2013Output table for the US for the year 2007, the applied exercise focuses on the government strategies for the \u201cManufacture of Motor vehicles\u201d sector

Environmental tax reform and double dividend evidence

The increasing attention to environmental damage and the problem of climate changes have led many studies to concentrate on environmental taxation as an incentive-based instrument of environmental policy. Focusing on the relationship among environmental, labour market policies and institutional sectors, this paper aims to investigate the economic effects of a fiscal reform designed with the intent of reducing the Greenhouse Gas (GHG) emissions, according to Kyoto Protocol. For this purpose, a Computable General Equilibrium (CGE) model is used with imperfection market for labour factor and a green tax on commodity output depending on the level of CO2 emission is introduced. Tax revenues are than completely distributed to the economy in order to reduce the income tax or to cut the regional tax on commodity value added. In this way a revenue-neutral environmental policy is tested and the double dividend and any other effect on national economy are assessed. The application will be done on a Social Accounting Matrix (SAM) for Italy for the 2003 year.Environmental taxation,CGE model,SAM

The economic impact of the Green Certificate market through the Macro Multiplier approach

In the last decade, as many other European countries, the Italian Government adopted several reforms in order to increase the use of Renewable Energy Sources (RES). The liberalization of the electricity market that represent one of these reforms aims to reach environmental benefits from the substitution of fossil fuel with renewable sources.The Italian Green Certificate market was introduced in 2002 in order to accomplish this objective and represents a mechanism where a quota of renewable electricity is imposed to suppliers in proportion to their sales. The electricity industries are obliged to meet this condition by producing the quantity of renewable electricity by means of a change in their production process, otherwise they must buy a number of certificates corresponding to the quota. This mechanism changes the importance of the electricity industry first in promoting climate protection, than in terms of the impact in the economy as a whole. A policy aimed to develop the market of green certificates may lead to environmental improvement by switching the energy production process to renewable resources. But above all an increase in demand for green certificates, resultant from a reform on the quota of renewable electricity, can generate positive change in all components of the industrial production. For this purpose, the paper aims to quantify the economic impact of a reform on Green Certificate market for the Italian system by means of the Macro Multiplier (MM) approach. The analysis is performed through the Hybrid Input-Output (I-O) model that allows expressing the energy flows in physical terms (GWh) while all other flows are expressed in monetary terms (e). Moreover, through the singular value decomposition of the inverse matrix of the model, which reveals� he set of key structures of the exogenous change of final demand, we identify the appropriate key structure� ble to obtain both the expected positive total output change and the increase of electricity� roduction from RES.Hybrid I-O model,Macro Multiplier,Environmental Policy

Regional double dividend from environmental tax reform: an application for Italian economy

The greenhouse effect forces national Governments to design environmental tax policies for facing not only global warming but also the negative economic consequences resulting from the reduction of emissions such as a negative change of GDP. This paper aims at verifying the impact of an environmental fiscal reform able to attain both the reduction of greenhouse gas emissions and the regional double dividend. We have decided to follow the computable general equilibrium approach for modelling the multisectoral income circular flow in the case of a bi-regional economy as described by a Social Accounting Matrix we have built for this purpose. The tools of analysis we chose represent suitable and consistent instruments in order to quantify the effects of an environmental tax reform. They can in fact highlight the possible differences in responses between macro regions in terms of regional GDP changes, regional prices and regional employment rate. In fact, the extended multisectoral framework, on which the model is developed, represents economic activities, imperfect labour market and institutional sectors behaviours in each macro region. The simulations performed concern the introduction of a progressive and proportional green tax on each type of commodity according to the corresponding level of CO2 emissions. Furthermore all simulations introduce a recycling scheme of green tax revenues, whose aim is reducing both the income tax and the regional tax on activities (IRAP). The application is done on a bi-regional Social Accounting Matrix for Italy for the year 2003

The economic impact of the Green Certificate market through the Macro Multiplier approach

In the last decade, as many other European countries, the Italian Government adopted several reforms in order to increase the use of Renewable Energy Sources (RES). The liberalization of the electricity market that represent one of these reforms aims to reach environmental benefits from the substitution of fossil fuel with renewable sources.The Italian Green Certificate market was introduced in 2002 in order to accomplish this objective and represents a mechanism where a quota of renewable electricity is imposed to suppliers in proportion to their sales. The electricity industries are obliged to meet this condition by producing the quantity of renewable electricity by means of a change in their production process, otherwise they must buy a number of certificates corresponding to the quota. This mechanism changes the importance of the electricity industry first in promoting climate protection, than in terms of the impact in the economy as a whole. A policy aimed to develop the market of green certificates may lead to environmental improvement by switching the energy production process to renewable resources. But above all an increase in demand for green certificates, resultant from a reform on the quota of renewable electricity, can generate positive change in all components of the industrial production. For this purpose, the paper aims to quantify the economic impact of a reform on Green Certificate market for the Italian system by means of the Macro Multiplier (MM) approach. The analysis is performed through the Hybrid Input-Output (I-O) model that allows expressing the energy flows in physical terms (GWh) while all other flows are expressed in monetary terms (e). Moreover, through the singular value decomposition of the inverse matrix of the model, which reveals the set of key structures of the exogenous change of final demand, we identify the appropriate key structure able to obtain both the expected positive total output change and the increase of electricity production from RES

Policies for electricity production from renewable sources. The Italian case

4noreservedThe Italian Government introduced the Green Certificate market in order to stimulate the production of electricity form Renewable Energy Sources (RES). The suppliers are obliged to produce a share of renewable electricity otherwise they must buy a number of certificates corresponding to the quota. The paper aims to quantify the economic impact of a reform on Green Certificate market through the Hybrid Input-Output. More- over, through the singular value decomposition of the inverse matrix of the model, we identify the appropriate key structure able to obtain both the expected positive total output change and the increase of electricity production from RES.mixedM. Ciaschini; R. Pretaroli; F. Severini; C. SocciCiaschini, Maurizio; Pretaroli, Rosita; Severini, Francesca; Socci, Claudi

Estimating the economic impact of tourism industry through the MM approach

Tourism is one of the fastest growing industries in Italy and has proven to be a valuable source of economic prosperity. The main issue emerging when measuring the impact of tourism is that tourism is usually considered as a specific industry while in most applied situations it shows traits of a complex and structured economic activity characterized by a blend of different industries. We will identify the relationship among the various industries making up the complex economic activity usually referred as the \u201ctourism industry\u201d. This is done through the application of the multisectoral analysis to the Italian case. The evaluation of tourism in terms of economic policy is performed through the definition of an index of interaction among industries

Unconventional monetary policy expansion: the economic impact through a dynamic CGE model

The ongoing economic stagnation and low inflation rates affecting EU have refuelled the debate on the role and the limits of monetary policy in pushing the economic growth. Given the tight margins for fiscal policy for EU state members, traditional and unconventional monetary policies are becoming more looked-for to break out of this condition. However, the main issue on whether the real or nominal aspects prevails still remains. In this situation, a framework able to identify and analyse any interaction between economic and financial flows becomes crucial to detect the dynamics pushing towards expansions or contractions resulting from monetary policies. Therefore, the aim of this paper is to investigate the direct and indirect impact of monetary policies implemented by the European Central Bank on the main Italian macroeconomic variables both in aggregate and disaggregate terms. For this purpose we use Dynamic Computable General Equilibrium model calibrated on the financial Social Accounting Matrix for Italian economy