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The Italy Model

274: Consumer price index (IT_CPI)
DEL(1: LOG(IT_CPI)) =
IT_CPI1 * DEL(1: LOG(IT_PIM)) + IT_CPI2 * DEL(1: LOG(IT_PGNP)) + (1 - IT_CPI1 - IT_CPI2) * LOG(IT_CPI(-1) / IT_CPI(-2)) + RES_IT_CPI

274: Consumer price index : Steady State Version (SS_IT_CPI)
DEL(1: LOG(IT_CPI)) =
DEL(1: LOG(IT_PGNP))+0 * (IT_CPI1 + IT_CPI2) + RES_IT_CPI

275: Unemployment rate (IT_UNR_A)
IT_UNR_A =
IT_UNR_FE + IT_UNR_1 * 100 * LOG(IT_GDP / IT_GDP_FE) + IT_UNR_2 * (IT_UNR(-1) - IT_UNR_FE(-1)) + RES_IT_UNR_A

275: Unemployment rate : Steady State Version (SS_IT_UNR_A)
IT_UNR_A =
IT_UNR_FE - 100 * LOG(IT_GDP / IT_GDP_FE) + RES_IT_UNR_A + IT_UNR_1 * IT_UNR_2 * 0

276: Unemployment rate (restricting the value to be above zero) (IT_UNR)
IT_UNR =
MAX(IT_UNR_A,0.1)

276: Unemployment rate (restricting the value to be above zero) : Steady State Version (SS_IT_UNR)
IT_UNR =
IT_UNR_A

277: Price level (GNP deflator) (IT_PGNP)
DEL(1: LOG(IT_PGNPNO)) =
IT_LAMBDA * (IT_DELTA_PI * DEL(1: LOG(IT_PGNPNO(1))) + (1 - IT_DELTA_PI) * DEL(1: LOG(IT_PGNPNO(-1)))) + (1 - IT_LAMBDA) * DEL(1: LOG(IT_PGNPNO(-1))) + IT_GAMMA / 100 * (IT_NLIN - IT_UNR) / (IT_UNR - IT_PHI) + RES_IT_PGNP

277: Price level (GNP deflator) : Steady State Version (SS_IT_PGNP)
0 * LOG(IT_PGNPNO) =
IT_GAMMA / 100 * (IT_NLIN - IT_UNR) / (IT_UNR - IT_PHI)+0 * IT_LAMBDA * IT_DELTA_PI + RES_IT_PGNP

278: Inflation (IT_INFL)
IT_INFL =
IT_MGROW / GREAL

278: Inflation : Steady State Version (SS_IT_INFL)
IT_INFL =
IT_MGROW / GREAL

279: Labor force growth (IT_DLLF)
IT_DLLF =
LOG(IT_LF / IT_LF(-1))

279: Labor force growth : Steady State Version (SS_IT_DLLF)
IT_DLLF =
LOG(IT_LF / IT_LF(-1))

280: Real GDP growth (IT_DLGDP)
IT_DLGDP =
LOG(IT_GDP / IT_GDP(-1))

280: Real GDP growth : Steady State Version (SS_IT_DLGDP)
IT_DLGDP =
LOG(IT_GDP / IT_GDP(-1))

281: Personal household expenditure (IT_C)
IT_C =
IT_C_DI + IT_C_PI

281: Personal household expenditure : Steady State Version (SS_IT_C)
IT_C =
IT_C_DI + IT_C_PI

282: Marginal propensity to consume (IT_MPC)
IT_MPC =
1 / IT_MPCINV

282: Marginal propensity to consume : Steady State Version (SS_IT_MPC)
IT_MPC =
IT_RSR * (1-1 / IT_SIGMA) + RES_IT_MPC / IT_SIGMA + IT_PROB

283: Marginal propensity to consume - inverse (IT_MPCINV)
IT_MPCINV(1) =
IT_MPCINV - 1 - ((1 - IT_SIGMA) * (IT_RSR + IT_PROB) - (RES_IT_MPC + IT_PROB)) * IT_MPCINV / IT_SIGMA

283: Marginal propensity to consume - inverse : Steady State Version (SS_IT_MPCINV)
IT_MPCINV =
1 / IT_MPC

284: Real human wealth - young (IT_WH1)
IT_WH1(1) =
IT_WH1 * (1 + IT_RSR + IT_ALPHA1 + RES_IT_WH1 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

284: Real human wealth - young : Steady State Version (SS_IT_WH1)
IT_WH1 * GREAL_SS =
IT_WH1 * (1 + IT_RSR + IT_ALPHA1 + RES_IT_WH1 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

285: Real human wealth - adult (IT_WH2)
IT_WH2(1) =
IT_WH2 * (1 + IT_RSR + IT_ALPHA2 + RES_IT_WH2 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

285: Real human wealth - adult : Steady State Version (SS_IT_WH2)
IT_WH2 * GREAL_SS =
IT_WH2 * (1 + IT_RSR + IT_ALPHA2 + RES_IT_WH2 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

286: Real human wealth - old (IT_WH3)
IT_WH3(1) =
IT_WH3 * (1 + IT_RSR + IT_ALPHA3 + RES_IT_WH3 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

286: Real human wealth - old : Steady State Version (SS_IT_WH3)
IT_WH3 * GREAL_SS =
IT_WH3 * (1 + IT_RSR + IT_ALPHA3 + RES_IT_WH3 + IT_PROB + EXP(IT_DLLF_SS)-1) - (((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_WK * IT_WK)

287: Consumption - current income (IT_C_DI)
IT_C_DI =
(IT_LAMBDA1 * IT_BCHI1 + IT_LAMBDA2 * IT_BCHI2 + IT_LAMBDA3 * (1 - IT_BCHI1 - IT_BCHI2)) * ((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_C_DI * GREAL**TME

287: Consumption - current income : Steady State Version (SS_IT_C_DI)
IT_C_DI =
(IT_LAMBDA1 * IT_BCHI1 + IT_LAMBDA2 * IT_BCHI2 + IT_LAMBDA3 * (1 - IT_BCHI1 - IT_BCHI2)) * ((1 - IT_BETA) * IT_GDP * IT_PGNP - IT_TAXH) / IT_P + RES_IT_C_DI * GREAL**TME

288: Consumption - permanent income (IT_C_PI)
IT_C_PI =
IT_MPC * (IT_WK + (IT_M + IT_B + IT_NFA / IT_ER) / IT_P + IT_BCHI1 * (1 - IT_LAMBDA1) * IT_WH1 + IT_BCHI2 * (1 - IT_LAMBDA2) * IT_WH2 + (1 - IT_BCHI1 - IT_BCHI2) * (1 - IT_LAMBDA3) * IT_WH3)

288: Consumption - permanent income : Steady State Version (SS_IT_C_PI)
IT_C_PI =
IT_MPC * (IT_WK + (IT_M + IT_B + IT_NFA / IT_ER) / IT_P + IT_BCHI1 * (1 - IT_LAMBDA1) * IT_WH1 + IT_BCHI2 * (1 - IT_LAMBDA2) * IT_WH2 + (1 - IT_BCHI1 - IT_BCHI2) * (1 - IT_LAMBDA3) * IT_WH3)

289: Real human wealth (IT_WH)
IT_WH =
IT_BCHI1 * IT_WH1 + IT_BCHI2 * IT_WH2 + (1 - IT_BCHI1 - IT_BCHI2) * IT_WH3

289: Real human wealth : Steady State Version (SS_IT_WH)
IT_WH =
IT_BCHI1 * IT_WH1 + IT_BCHI2 * IT_WH2 + (1 - IT_BCHI1 - IT_BCHI2) * IT_WH3

290: Consumption of oil (IT_COIL)
DEL(1: LOG(IT_COIL)) =
IT_COIL0 + IT_COIL1 * DEL(1: LOG(IT_GDP)) + IT_COIL2 * DEL(1: LOG(POIL / IT_ER / IT_PGNP)) + IT_COIL3 * LOG(POIL(-1) / IT_ER(-1) / IT_PGNP(-1)) + IT_COIL4 * LOG(IT_GDP(-1) / IT_COIL(-1)) + RES_IT_COIL

290: Consumption of oil : Steady State Version (SS_IT_COIL)
LOG(GREAL) =
IT_COIL0 + IT_COIL1 * LOG(GREAL) + IT_COIL2 * 0 + IT_COIL3 * LOG(POIL / IT_ER / IT_PGNP) + IT_COIL4 * LOG(IT_GDP / IT_COIL) + RES_IT_COIL

291: Change in investment relative to the capital stock (IT_K)
IT_INVEST / IT_K(-1) - (IT_DELTA_SS + GREAL_SS - 1) =
IT_K1 * (IT_WK / IT_K(-1)-1) + IT_K2 * (IT_WK(-1) / IT_K(-2)-1) + RES_IT_K

291: Change in investment relative to the capital stock : Steady State Version (SS_IT_K)
GREAL * IT_INVEST / IT_K - (IT_DELTA_SS + GREAL_SS - 1) =
(IT_K1 + IT_K2) * (GREAL * IT_WK / IT_K - 1) + RES_IT_K

292: Marginal product of capital (IT_MPK)
IT_MPK =
IT_BETA * IT_GDP / IT_K

292: Marginal product of capital : Steady State Version (SS_IT_MPK)
IT_MPK =
IT_BETA * IT_GDP / IT_K

293: Tobin's Q (IT_Q)
IT_Q =
IT_CHI * (IT_INVEST / IT_K(-1) - (IT_DELTA_SS + GREAL_SS - 1))+1

293: Tobin's Q : Steady State Version (SS_IT_Q)
IT_Q =
1 + IT_CHI * 0

294: Real market value of the capital stock (IT_WK)
IT_WK(1) =
IT_WK * (1 + IT_RSR + IT_K / IT_K(-1)-1 + IT_DELTA + RES_IT_WK) - (IT_BETA * IT_GDP * IT_PGNP - IT_TAXK) / IT_P + (IT_CHI / 2 * ((IT_Q - 1) / IT_CHI)**2 + IT_INVEST / IT_K(-1) * (IT_Q - 1)) * IT_K(-1) * IT_PGNP / IT_P

294: Real market value of the capital stock : Steady State Version (SS_IT_WK)
IT_WK * GREAL =
IT_WK * (1 + IT_RSR + GREAL - 1 + IT_DELTA + RES_IT_WK) - (IT_BETA * IT_GDP * IT_PGNP - IT_TAXK) / IT_P

295: Real gross business investment (IT_INVEST)
IT_INVEST =
DEL(1: IT_K) + IT_DELTA * IT_K(-1)

295: Real gross business investment : Steady State Version (SS_IT_INVEST)
IT_INVEST =
(1 - (1 - IT_DELTA) / GREAL) * IT_K

296: Export volume - manufactured goods (IT_XM)
DEL(1: LOG(IT_XM)) =
IT_XM0 + DEL(1: LOG(IT_FACT)) + IT_XM1 * DEL(1: IT_RCI) + IT_XM2 * (IT_XM3 * IT_RCI(-1) + LOG(IT_FACT(-1)) - LOG(IT_XM(-1))) + RES_IT_XM

296: Export volume - manufactured goods : Steady State Version (SS_IT_XM)
LOG(GREAL) =
IT_XM0 + LOG(GREAL) + IT_XM1 * 0 + IT_XM2 * (IT_XM3 * IT_RCI + LOG(IT_FACT) - LOG(IT_XM)) + RES_IT_XM

297: Export volume - manufactured goods, adjusted for real world trade discrepancy (IT_XMA)
IT_XMA =
IT_XM + T05 * (WTRADER - TRDER * GREAL**TME) / IT_E96

297: Export volume - manufactured goods, adjusted for real world trade discrepancy : Steady State Version (SS_IT_XMA)
IT_XMA =
IT_XM + T05 * (WTRADER - TRDER * GREAL**TME) / IT_E96

298: Total exports volume (IT_XT)
IT_XT =
IT_XMA + IT_XOIL

298: Total exports volume : Steady State Version (SS_IT_XT)
IT_XT =
IT_XMA + IT_XOIL

299: Definition of real domestic economic activity (IT_ACT)
IT_ACT =
IT_C_MPROP * IT_C + IT_INVEST_MPROP * IT_INVEST + IT_G_MPROP * IT_G + IT_XT_MPROP * IT_XT

299: Definition of real domestic economic activity : Steady State Version (SS_IT_ACT)
IT_ACT =
IT_C_MPROP * IT_C + IT_INVEST_MPROP * IT_INVEST + IT_G_MPROP * IT_G + IT_XT_MPROP * IT_XT

300: Import volume - manufactured goods (IT_IM)
DEL(1: LOG(IT_IM)) =
IT_IM0 + DEL(1: LOG(IT_ACT)) + IT_IM1 * DEL(1: LOG(IT_PIMA / IT_PGNPNO)) + IT_IM2 * (IT_IM3 * LOG(IT_PIMA(-1) / IT_PGNPNO(-1)) + LOG(IT_ACT(-1)) - LOG(IT_IM(-1))) + RES_IT_IM

300: Import volume - manufactured goods : Steady State Version (SS_IT_IM)
LOG(GREAL) =
IT_IM0 + LOG(GREAL) + IT_IM1 * 0 + IT_IM2 * (IT_IM3 * LOG(IT_PIMA / IT_PGNPNO) + LOG(IT_ACT) - LOG(IT_IM)) + RES_IT_IM

301: Import volume - oil (IT_IOIL)
IT_IOIL =
IT_COIL + IT_XOIL - IT_PRODOIL + RES_IT_IOIL * GREAL**TME

301: Import volume - oil : Steady State Version (SS_IT_IOIL)
IT_IOIL =
IT_COIL + IT_XOIL - IT_PRODOIL + RES_IT_IOIL * GREAL**TME

302: Import volume - commodities (IT_ICOM)
DEL(1: LOG(IT_ICOM)) =
IT_IC0 + IT_IC2 * DEL(1: LOG(PCOM / IT_ER / IT_PGNP)) + IT_IC1 * DEL(1: LOG(IT_GDP)) + IT_IC3 * LOG(PCOM(-1) / IT_ER(-1) / IT_PGNP(-1)) + IT_IC4 * LOG(IT_GDP(-1)) + IT_IC5 * LOG(IT_ICOM(-1)) + RES_IT_ICOM - (IT_IC4 + IT_IC5) * LOG(GREAL**TME)

302: Import volume - commodities : Steady State Version (SS_IT_ICOM)
LOG(GREAL) =
IT_IC0 + IT_IC2 * 0 + IT_IC1 * LOG(GREAL) + IT_IC3 * LOG(PCOM / IT_ER / IT_PGNP) + IT_IC4 * LOG(IT_GDP / GREAL) + IT_IC5 * LOG(IT_ICOM / GREAL) + RES_IT_ICOM - (IT_IC4 + IT_IC5) * LOG(GREAL**TME)

303: Total imports volume (IT_IT)
IT_IT =
IT_IM + IT_IOIL + IT_ICOM

303: Total imports volume : Steady State Version (SS_IT_IT)
IT_IT =
IT_IM + IT_IOIL + IT_ICOM

304: Definition of real domestic absorption (IT_A)
IT_A =
IT_C + IT_INVEST + IT_G

304: Definition of real domestic absorption : Steady State Version (SS_IT_A)
IT_A =
IT_C + IT_INVEST + IT_G

305: Real GDP identity (IT_GDP)
IT_GDP =
IT_A + IT_XT - IT_IT

305: Real GDP identity : Steady State Version (SS_IT_GDP)
IT_GDP =
IT_A + IT_XT - IT_IT

306: Definition of real GNP (IT_GNP)
IT_GNP =
IT_GDP + (US_R + SUM(I =
-3 TO -1: IT_PREM(I)) / 3) * IT_NFA(-1) / IT_ER / IT_PGNP + RES_IT_GNP * GREAL**TME

306: Definition of real GNP : Steady State Version (SS_IT_GNP)
IT_GNP =
IT_GDP + (US_R + IT_PREM) * IT_NFA / (US_INFL * GREAL) / IT_ER / IT_PGNP + RES_IT_GNP * GREAL**TME

307: Real wealth (financial plus discounted future income) (IT_W)
IT_W =
IT_WH + IT_WK + (IT_M + IT_B + IT_NFA / IT_ER) / IT_P

307: Real wealth (financial plus discounted future income) : Steady State Version (SS_IT_W)
IT_W =
IT_WH + IT_WK + (IT_M + IT_B + IT_NFA / IT_ER) / IT_P

308: Real disposable income (IT_YD)
IT_YD =
(IT_GDP * IT_PGNP - IT_TAX) / IT_P - IT_DELTA * IT_K(-1)

308: Real disposable income : Steady State Version (SS_IT_YD)
IT_YD =
(IT_GDP * IT_PGNP - IT_TAX) / IT_P - IT_DELTA * IT_K / GREAL

309: Total government expenditures - nominal (IT_GE)
IT_GE =
IT_P * IT_G + IT_R * IT_B(-1) + IT_GEXOG

309: Total government expenditures - nominal : Steady State Version (SS_IT_GE)
IT_GE =
IT_P * IT_G + IT_R * IT_B / (GREAL * IT_INFL) + IT_GEXOG

310: Government tax receipts (IT_TAX)
IT_TAX =
IT_TRATE * IT_PGNP * IT_GNP

310: Government tax receipts : Steady State Version (SS_IT_TAX)
IT_TAX =
IT_TRATE * IT_PGNP * IT_GNP

311: Taxes on capital (IT_TAXK)
IT_TAXK =
IT_TAXK_ALPHA * IT_TAXK_SHAR * IT_TAX + (1 - IT_TAXK_ALPHA) * IT_TRATEK * IT_BETA * IT_GDP * IT_PGNP

311: Taxes on capital : Steady State Version (SS_IT_TAXK)
IT_TAXK =
IT_TAXK_ALPHA * IT_TAXK_SHAR * IT_TAX + (1 - IT_TAXK_ALPHA) * IT_TRATEK * IT_BETA * IT_GDP * IT_PGNP

312: Taxes on labor (IT_TAXH)
IT_TAXH =
IT_TAX - IT_TAXK

312: Taxes on labor : Steady State Version (SS_IT_TAXH)
IT_TAXH =
IT_TAX - IT_TAXK

313: Average tax rate (IT_TRATE)
IT_TRATE =
IT_TRATE_EXOG * (1 - IT_TRATE_ALPHA) + IT_TRATE_ALPHA * (SUM(I =
-2 TO 2: IT_TRATE(I) / 5) + TAU1 * (IT_B(1) / (IT_GNP(1) * IT_PGNP(1)) - IT_BT_GDP_RAT(1)) + RES_IT_TRATE)

313: Average tax rate : Steady State Version (SS_IT_TRATE)
0 =
TAU1 * (IT_B / (IT_GNP * IT_PGNP) - IT_BT_GDP_RAT) + RES_IT_TRATE

314: No equation Description (IT_BT)
IT_BT =
IT_BT_GDP_RAT * IT_GNP * IT_PGNP

314: No equation Description : Steady State Version (SS_IT_BT)
IT_BT =
IT_BT_GDP_RAT * IT_GNP * IT_PGNP

315: Government balance sheet (solves for nominal government debt) (IT_B)
DEL(1: IT_B) + DEL(1: IT_M) =
IT_R * IT_B(-1) + IT_P * IT_G - IT_TAX

315: Government balance sheet (solves for nominal government debt) : Steady State Version (SS_IT_B)
(IT_B + IT_M) * (1-1 / (IT_INFL * GREAL)) =
IT_R * IT_B / (IT_INFL * GREAL) + IT_P * IT_G - IT_TAX

316: Definition of nominal government deficit (IT_GDEF)
IT_GDEF =
DEL(1: IT_B + IT_M)

316: Definition of nominal government deficit : Steady State Version (SS_IT_GDEF)
IT_GDEF =
(IT_B + IT_M) * (1-1 / (IT_INFL * GREAL))

317: Money demand function (IT_M)
LOG(IT_M / IT_P) =
IT_M0 + (1 - IT_M4) * LOG(IT_A) + IT_M2 * IT_RS + IT_M4 * LOG(IT_M(-1) / IT_P(-1)) + RES_IT_M

317: Money demand function : Steady State Version (SS_IT_M)
LOG(IT_M / IT_P) =
IT_M0 + (1 - IT_M4) * LOG(IT_A) + IT_M2 * IT_RS + IT_M4 * LOG(IT_M / IT_P / GREAL) + RES_IT_M

318: Money supply reaction function - short-term interest rate (IT_RS)
IT_RS =
(1 - IT_X_RS1) * IT_RS_EXOG + IT_X_RS1 * (IT_RS(-1) + IT_RS1 * LOG(IT_MT / IT_M) / IT_M2 + IT_RS2 * LOG(GR_ER / IT_ER / IT_PAR) + IT_RSCON2 + RES_IT_RS) + IT_RS1PERM * 0

318: Money supply reaction function - short-term interest rate : Steady State Version (SS_IT_RS)
0 =
IT_RS1PERM * LOG(IT_MT / IT_M) / IT_M2 + IT_RS2 * LOG(GR_ER / IT_ER / IT_PAR) + RES_IT_RS + 0 * IT_RS1 * IT_RS_EXOG * IT_RSCON * IT_RSCON2

319: Term structure of interest rates (solves for long-term rate) (IT_RL)
IT_RL / 100 =
((1 + IT_RS / 100) * (1 + IT_RS(1) / 100) * (1 + IT_RS(2) / 100) * (1 + IT_RS(3) / 100) * (1 + IT_RS(4) / 100) * (1 + IT_RS(5) / 100) * (1 + IT_RS(6) / 100) * (1 + IT_RS(7) / 100) * (1 + IT_RS(8) / 100) * (1 + IT_RS(9) / 100))**0.1 * (1 + IT_TPREM)-1 + RES_IT_RL

319: Term structure of interest rates (solves for long-term rate) : Steady State Version (SS_IT_RL)
IT_RL / 100 =
(1 + IT_RS / 100) * (1 + IT_TPREM)-1 + RES_IT_RL

320: Interest rate on NFA faced by industrialized countries (IT_R)
IT_R =
0.5 * IT_RS(-1) / 100+0.5 * SUM(I =
-3 TO -1: IT_RL(I) / 100) / 3

320: Interest rate on NFA faced by industrialized countries : Steady State Version (SS_IT_R)
IT_R =
0.5 * IT_RS / 100+0.5 * IT_RL / 100

321: Real long-term interest rate (ex ante) (IT_RLR)
IT_RLR =
(1 + IT_RL / 100) / (IT_P(10) / IT_P)**0.1-1

321: Real long-term interest rate (ex ante) : Steady State Version (SS_IT_RLR)
IT_RLR =
(1 + IT_RL / 100) / IT_INFL - 1

322: Real short-term interest rate (ex ante) (IT_RSR)
IT_RSR =
(1 + IT_RS / 100) / (IT_P(1) / IT_P)-1

322: Real short-term interest rate (ex ante) : Steady State Version (SS_IT_RSR)
IT_RSR =
(1 + IT_RS / 100) / IT_INFL - 1

323: Non-oil GNP deflator (IT_PGNPNO)
IT_PGNPNO =
(IT_GDP * IT_PGNP - IT_PRODOIL * POIL / IT_ER * IT_E96) / (IT_GDP - IT_PRODOIL)

323: Non-oil GNP deflator : Steady State Version (SS_IT_PGNPNO)
IT_PGNPNO =
(IT_GDP * IT_PGNP - IT_PRODOIL * POIL / IT_ER * IT_E96) / (IT_GDP - IT_PRODOIL)

324: PGNP identity (with discrepancy) (IT_P)
IT_PGNP =
(IT_P * IT_A + IT_XT * IT_PXT - IT_IT * IT_PIT) / IT_GDP + RES_IT_P * IT_PGNP

324: PGNP identity (with discrepancy) : Steady State Version (SS_IT_P)
IT_PGNP =
(IT_P * IT_A + IT_XT * IT_PXT - IT_IT * IT_PIT) / IT_GDP + RES_IT_P * IT_PGNP

325: Manufactured goods export price (IT_PXM)
DEL(1: LOG(IT_PXM)) =
IT_PXM0 + IT_PXM1 * DEL(1: LOG(IT_PGNPNO)) + (1 - IT_PXM1) * DEL(1: LOG(IT_PFM)) + IT_PXM2 * LOG(IT_PGNPNO(-1) / IT_PXM(-1)) + RES_IT_PXM

325: Manufactured goods export price : Steady State Version (SS_IT_PXM)
IT_INFL =
IT_PXM0 + IT_PXM1 * IT_INFL + (1 - IT_PXM1) * IT_INFL + IT_PXM2 * LOG(IT_PGNPNO / IT_PXM) + RES_IT_PXM

326: Total export price (IT_PXT)
IT_PXT =
(IT_XMA * IT_PXM + POIL / IT_ER * IT_E96 * IT_XOIL) / IT_XT

326: Total export price : Steady State Version (SS_IT_PXT)
IT_PXT =
(IT_XMA * IT_PXM + POIL / IT_ER * IT_E96 * IT_XOIL) / IT_XT

327: Manufactured goods import price (IT_PIM)
IT_PIM =
(S0105 * US_PXM + S0205 * JA_PXM * JA_ER / JA_E96 + S0305 * GR_PXM * GR_ER / GR_E96 + S0405 * FR_PXM * FR_ER / FR_E96 + S0505 * IT_PXM * IT_ER / IT_E96 + S0605 * UK_PXM * UK_ER / UK_E96 + S0705 * CA_PXM * CA_ER / CA_E96 + S0805 * SI_PXM * SI_ER / SI_E96 + S0905 * RW_PXM * RW_ER / RW_E96) / (IT_ER / IT_E96) * (1 + RES_IT_PIM)

327: Manufactured goods import price : Steady State Version (SS_IT_PIM)
IT_PIM =
(S0105 * US_PXM + S0205 * JA_PXM * JA_ER / JA_E96 + S0305 * GR_PXM * GR_ER / GR_E96 + S0405 * FR_PXM * FR_ER / FR_E96 + S0505 * IT_PXM * IT_ER / IT_E96 + S0605 * UK_PXM * UK_ER / UK_E96 + S0705 * CA_PXM * CA_ER / CA_E96 + S0805 * SI_PXM * SI_ER / SI_E96 + S0905 * RW_PXM * RW_ER / RW_E96) / (IT_ER / IT_E96) * (1 + RES_IT_PIM)

328: Import price for manufactured goods - adjusted for world trade discrepancy (IT_PIMA)
IT_PIMA =
IT_PIM + T05 * (WTRADE - TRDE * GREAL**TME * US_INFL**TME) / IT_ER / IT_IM

328: Import price for manufactured goods - adjusted for world trade discrepancy : Steady State Version (SS_IT_PIMA)
IT_PIMA =
IT_PIM + T05 * (WTRADE - TRDE * GREAL**TME * US_INFL**TME) / IT_ER / IT_IM

329: Total import price (IT_PIT)
IT_PIT =
(IT_IM * IT_PIMA + IT_IOIL * POIL / IT_ER * IT_E96 + IT_ICOM * PCOM / IT_ER * IT_E96) / IT_IT

329: Total import price : Steady State Version (SS_IT_PIT)
IT_PIT =
(IT_IM * IT_PIMA + IT_IOIL * POIL / IT_ER * IT_E96 + IT_ICOM * PCOM / IT_ER * IT_E96) / IT_IT

330: No equation Description (IT_TFP_FE)
LOG(IT_TFP_FE) =
RES_IT_TFP_FE

330: No equation Description : Steady State Version (SS_IT_TFP_FE)
LOG(IT_TFP_FE) =
RES_IT_TFP_FE

331: Full-employment output production function (IT_GDP_FE)
IT_GDP_FE =
IT_TFP_FE * IT_K**IT_BETA * ((1 - IT_UNR_FE / 100) * IT_LF)**(1 - IT_BETA)

331: Full-employment output production function : Steady State Version (SS_IT_GDP_FE)
IT_GDP_FE =
IT_TFP_FE * IT_K**IT_BETA * ((1 - IT_UNR_FE / 100) * IT_LF)**(1 - IT_BETA)

332: Labor force (IT_LF)
IT_LF =
IT_POP * IT_PART / (1 + IT_DEM3)

332: Labor force : Steady State Version (SS_IT_LF)
IT_LF =
IT_POP * IT_PART / (1 + IT_DEM3)

333: Capacity utilization (IT_CU)
IT_CU =
100 * IT_GDP / IT_GDP_FE

333: Capacity utilization : Steady State Version (SS_IT_CU)
IT_CU =
100 * IT_GDP / IT_GDP_FE

334: Balance of payments (claims on foreigners), current U.S. dollars (IT_NFA)
DEL(1: IT_NFA) =
(IT_XT * IT_PXT - IT_IT * IT_PIT) * IT_ER + (US_R + SUM(I =
-3 TO -1: IT_PREM(I)) / 3) * IT_NFA(-1) + RES_IT_NFA * US_INFL**TME * GREAL**TME

334: Balance of payments (claims on foreigners), current U.S. dollars : Steady State Version (SS_IT_NFA)
IT_NFA * (1-1 / (US_INFL * GREAL)) =
(IT_XT * IT_PXT - IT_IT * IT_PIT) * IT_ER + (US_R + IT_PREM) * IT_NFA / (US_INFL * GREAL) + RES_IT_NFA * US_INFL**TME * GREAL**TME

335: Trade balance - local currency (IT_TB)
IT_TB =
IT_XT * IT_PXT - IT_IT * IT_PIT

335: Trade balance - local currency : Steady State Version (SS_IT_TB)
IT_TB =
IT_XT * IT_PXT - IT_IT * IT_PIT

336: Current account - current U.S. dollars (IT_CURBAL)
IT_CURBAL =
DEL(1: IT_NFA)

336: Current account - current U.S. dollars : Steady State Version (SS_IT_CURBAL)
IT_CURBAL =
IT_NFA * (1-1 / (US_INFL * GREAL))

337: Open interest parity condition (solves for exchange rate) (IT_ER)
1 + US_RS / 100 =
(1 + IT_RS / 100) * IT_ER(1) / IT_ER - IT_PREM + RES_IT_ER

337: Open interest parity condition (solves for exchange rate) : Steady State Version (SS_IT_ER)
1 + US_RS / 100 =
(1 + IT_RS / 100) * US_INFL / IT_INFL - IT_PREM + RES_IT_ER

338: Real effective exchange rate (relative export price) (IT_RCI)
IT_RCI =
LOG(IT_PXM) - LOG(IT_PFM)

338: Real effective exchange rate (relative export price) : Steady State Version (SS_IT_RCI)
IT_RCI =
LOG(IT_PXM) - LOG(IT_PFM)

339: Weighted average of foreign activity (IT_FACT)
IT_FACT =
(US_IM * US_E96 * S0501 + JA_IM * JA_E96 * S0502 + GR_IM * GR_E96 * S0503 + FR_IM * FR_E96 * S0504 + IT_IM * IT_E96 * S0505 + UK_IM * UK_E96 * S0506 + CA_IM * CA_E96 * S0507 + SI_IM * SI_E96 * S0508 + (HO_IM + DC_IM) * RW_E96 * S0509) / IT_E96

339: Weighted average of foreign activity : Steady State Version (SS_IT_FACT)
IT_FACT =
(US_IM * US_E96 * S0501 + JA_IM * JA_E96 * S0502 + GR_IM * GR_E96 * S0503 + FR_IM * FR_E96 * S0504 + IT_IM * IT_E96 * S0505 + UK_IM * UK_E96 * S0506 + CA_IM * CA_E96 * S0507 + SI_IM * SI_E96 * S0508 + (HO_IM + DC_IM) * RW_E96 * S0509) / IT_E96

340: Prices in foreign markets (IT_PFM)
LOG(IT_PFM) =
W0501 * LOG(US_PXM * US_ER / US_E96) + W0502 * LOG(JA_PXM * JA_ER / JA_E96) + W0503 * LOG(GR_PXM * GR_ER / GR_E96) + W0504 * LOG(FR_PXM * FR_ER / FR_E96) + W0505 * LOG(IT_ER / IT_E96) + W0506 * LOG(UK_PXM * UK_ER / UK_E96) + W0507 * LOG(CA_PXM * CA_ER / CA_E96) + W0508 * LOG(SI_PXM * SI_ER / SI_E96) + W0509 * LOG(RW_PXM * RW_ER / RW_E96)

340: Prices in foreign markets : Steady State Version (SS_IT_PFM)
LOG(IT_PFM) =
W0501 * LOG(US_PXM * US_ER / US_E96) + W0502 * LOG(JA_PXM * JA_ER / JA_E96) + W0503 * LOG(GR_PXM * GR_ER / GR_E96) + W0504 * LOG(FR_PXM * FR_ER / FR_E96) + W0505 * LOG(IT_ER / IT_E96) + W0506 * LOG(UK_PXM * UK_ER / UK_E96) + W0507 * LOG(CA_PXM * CA_ER / CA_E96) + W0508 * LOG(SI_PXM * SI_ER / SI_E96) + W0509 * LOG(RW_PXM * RW_ER / RW_E96)

341: Nominal effective exchange rate (IT_NEER)
IT_NEER =
EXP( - V0501 * LOG(US_ER / US_E96) - V0502 * LOG(JA_ER / JA_E96) - V0503 * LOG(GR_ER / GR_E96) - V0504 * LOG(FR_ER / FR_E96) + LOG(IT_ER / IT_E96) - V0506 * LOG(UK_ER / UK_E96) - V0507 * LOG(CA_ER / CA_E96) - V0508 * LOG(SI_ER / SI_E96))

341: Nominal effective exchange rate : Steady State Version (SS_IT_NEER)
IT_NEER =
EXP( - V0501 * LOG(US_ER / US_E96) - V0502 * LOG(JA_ER / JA_E96) - V0503 * LOG(GR_ER / GR_E96) - V0504 * LOG(FR_ER / FR_E96) + LOG(IT_ER / IT_E96) - V0506 * LOG(UK_ER / UK_E96) - V0507 * LOG(CA_ER / CA_E96) - V0508 * LOG(SI_ER / SI_E96))