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We estimate a fully-fledged structural system for the housing market in Italy, taking into account the multi-fold link with bank lending to both households and construction firms. The model allows the house supply to vary in the short run and the banking sector to affect the equilibrium in the housing market, through its effect on housing supply and demand. We show that house prices react mostly to standard drivers such as disposable income, expected inflation and demographic pressures. Lending conditions also have a significant impact, especially through their effects on mortgage loans, and consequently on housing demand. Allowing short-run adjustment in house supply implies a weaker response of house prices to a change in the monetary stance or in banks� deleveraging process. Finally, we find that since the mid-eighties house price developments in Italy have been broadly in line with the fundamentals; during the recent financial crisis, the worsening in credit supply conditions dampened house price dynamics, partly offsetting the positive stimulus provided by the easing of the monetary policy stance.

In this paper, we investigate whether the completion of the Single Market Programme has enhanced competition on the product markets across European countries, while taking into account the companion structural reforms undertaken by the member countries. In particular, since the Single Market Programme went hand in hand with major reforms in the labour market and in the institutional setting of important industries (i.e. network industries), we test for a break in both mark-ups and the division of rent between capital and labour. For this purpose we encompass efficient bargaining in the labour market in both our theoretical and empirical model. Using industry data for ten EU countries we find that, without controlling for changes in the rent sharing, mark-up estimates tend to increase in the 1990s. However, once we assume efficient bargaining in the labour market, mark-ups remain virtually unchanged or even decrease in some sectors or groups of countries; the result stems from the declining shares of rents accruing to workers owing to a decline in their bargaining power. Without controlling for this development, a rise in firms� profitability due to rent reallocation could be wrongly interpreted as an increase in market power. At the industry level the evidence is particularly strong for high and medium-tech manufacturing, for construction and for those activities that went through deep institutional changes and privatization programmes.

Developments in the real-estate sector are of crucial importance for the business cycle and financial stability. This study analyses developments in the Italian housing market on the basis of both real and financial variables. Following the sharp contraction of the market during the financial crisis and the more general fall in economic activity, a few signals suggests that the recession in the housing market is easing somewhat. However, the degree of uncertainty remains considerable. In recent months the ratio between the flow of bad debts to total outstanding loans to households and construction firms has reached the highest levels since the beginning of the decade. The paper also investigates three issues of a more structural nature. First, it examines the performance and the regulatory framework of real-estate investment funds in Italy. Second, it analyses the main characteristics of the taxation of residential housing, with reference to ownership, rentals and transactions. Finally, the paper estimates the impact on residential house prices of the growing demand for housing services by immigrants.

Assembling information from several sources and a drawing on specially designed new survey, this paper finds that the shortfall in the supply of child care facilities remains large with respect to potential demand but is less severe with respect to the effective demand by households in Italy. Controlling for individual characteristics and local external environment, empirical evidence points to the key role played by the cost-quality schedule in supporting formal care. Local governments exert a significant influence on this factor through multiple channels, such as the intensity of regulation on quality standards, the degree of flexibility in the service provision, and the financing and tariff policies. These channels differ widely across geographical areas. The local set-up can give rise to contrasting effects on both the profitability of private childcare providers, who hardly fill the potential gap in the public network, and on household demand, which could benefit to a limited extent from a greater availability of facilities in case these are of unsatisfactory quality.

We present a new indicator of house prices in Italy, with more extensive geographical and time coverage. The new indicator now makes it possible to analyze medium- and long-term trends with satisfactory representation of the Italian housing market. It also allows for timely updating, for prompt assessment of housing input both to the business cycle and to inflationary pressures. We offer a preliminary identification, based solely on graphical inspection, of four different property price cycles since the late 1960s; the latest began at the end of the 1990s and signaled a slowdown since 2006. Finally, we tentatively assess the effect of including transactions in dwellings in the Italian HICP basket according to the net acquisition approach, which apparently results in about a quarter point of additional inflation each year since 2000.