Introduzione sezione

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

Working Papers
  • N°4 -  Maggio 2022
  • ISSN

    ISSN 1972-411X


    Riccardo Barbieri Hermitte, Alberto Cagnazzo, Carlo A. Favero, Francesco Felici, Valeria Macauda, Francesco Nucci and Cristian Tegami

ITFIN is a quarterly, stock-flow 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-flow consistent approach to their balance sheets. In modelling 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.


Appendix - The ITFIN model: Variables and Regression Results