The Macroeconometric models for Italy (MEMO-IT): Policy Evaluation and Future Challanges

In May 2012, Istat released its first macroeconomic forecasts for 2012-2013 based on MeMo-It, the new Macroeconometric Model of the Italian economy (Istat, 2012). The development of MeMo-it was the result of the transfer of the forecasting duties from Isae to Istat. The driving principles of the new model are the transparency and the best fit to the available information set and to a lesser extent the adeherece to a theoretical economic paradigm. The research activity to develop MeMo-It follows two main lines: the first is devoted to extend the capabilities of the model for policy evaluations and aims at increase its ability to perform real time analysis of policy measures; the other is focused on the improvements of the methodological features of the model. MeMo-it is currently used to accomplish Istat institutional commitments (the so called Audizioni) and at the same time, it is subject to continuous developments to incorporate to the energy sector and to improve its long-run properties. After a short presentation of the main features of MeMo-It in section 2, section 3 discusses some evidence on its capabilities for policy evaluation. Section 4 illustrates the state of the art of the ongoing research activity to develop the model and section 5 concludes.