Analyzing MeMo-It supply side properties

The aim of this paper is to review the properties of the newly released MeMo-It econometric model by looking at its supply side. The analysis hinges on the link between potential output, which determines the level of GDP in the medium term, and all the channels of transmission that can affect it. The specification of the price, wage and participation rate equations are in turn examined so as to single out the interactions that arise amongst them. The analysis points out also that no homogeneity restrictions are imposed on the price and wage equations and it suggests that the impact on model properties of this decision should be farther investigated. The final section of the paper comments on the size of MeMo-It fiscal multipliers