Non zero sovereign and private sector default probabilities are introduced in a monetary open economy model considering a monopolistically competitive financial sector. This modification allows to empirically evaluate whether the emergence of a financial wedge in the form of a sovereign risk...

We develop a monetary open economy model characterized by a highly detailed labor market structure and fiscal sector. By introducing a distinction between the wage negotiated by newly hired workers and incumbents, we evaluate the efficacy of two labor market targeted fiscal policies, a hiring...

We estimate with Bayesian techniques the Italian dynamic General Equilibrium Model (IGEM), which has been developed at the Italian Treasury Department, Ministry of Economy and Finance, to assess the effects of alter-native policy interventions. We analyze and discuss the estimated effects of...