This paper extends IGEM, the dynamic general equilibrium model for the Italian
economy currently in use at the Italian Department of the Treasury for economic policy analysis. In this new variant of the model the public sector is explicitly modelled as suppliers of goods and services. With this tool in hand we are able to present an in-depth analysis of expenditure-based fiscal multipliers and ameliorate our understanding of the potential macroeconomic effects of several policy interventions,such as those aimed at the rationalization of public spending, at the improvement of the business environment and at fostering productivity of the public administration (PA).