Cooperation agreement between Central Bank of Malta and the University of Macerata, Italy

The Central Bank of Malta has entered into a cooperation agreement with the University of Macerata involving the development of a Computable General Equilibrium (CGE) model for Malta. The model is seen to complement the existing suite of models currently in use at the Bank.

According to the Central Bank of Malta Governor, Prof. Scicluna, “This type of model is better suited to answer questions related to both demand and supply side shocks to particular sectors as well as to better gauge the impact of CO₂ emissions by industry.”

The agreement was signed by Prof. Scicluna and Prof. Francesco Adornato, Rector of the University of Macerata. The scientific supervisor of this project is Prof. Claudio Socci from the University of Macerata.

The Department of Economics and Law at the University of Macerata boasts expertise in the construction of national and multiregional Social Accounting Matrices and CGE models for policy impact analysis for many countries. A CGE model is a large-scale model that simulates the core interactions within an economy, particularly the inter-dependencies between different product markets, factor markets and institutional sectors.

Apart from developing a CGE model for Malta, the agreement also encompasses the training of Bank staff, who will have the opportunity to acquire skills in the development and maintenance of CGE models. The Bank team includes Noel Rapa, and the Bank’s Chief Economist Dr Aaron Grech with the active participation of Dr Ian P. Cassar from the University of Malta – an expert in Input Output modelling who will also interact with the team of researchers at the University of Macerata.

Such cooperation is also beneficial in broadening the links between the Bank and leading academic institutions.