Italy : Quantifying the Benefits of a Comprehensive Reform Package

This paper seeks to quantify the net benefits of a comprehensive reform package aimedat addressing Italy's inter-related challenges. Specifically, it simulates the growth andcompetitiveness effects of a package of fiscal, financial, wage bargaining, and otherstructural reforms. Credible implementation of such a package yields substantial mediumtermdividends at negligible near-term growth costs. Real GDP growth is estimated to besubstantially higher over the medium term, while the real effective exchange ratedepreciates notably