A Micro-macro Model for Fiscal Policy Simulations

This paper develops a macro micro approach to study the impact of fiscal policies on firms and families. Macro and micro models differ in aims and data sources. The first ones are mainly focused on representing the structural features of the economic system and the flows among economic agents. Micro models are primarily used for measurement of household's income distribution. Combining micro and macro models, we are able to estimate both the direct and indirect effects of policy changes preserving and capitalising the information on the distribution of income. We run the unified micro macro approach to study the effects of the fiscal changes established in 2008 by the Italian government.