Using the simple arithmetic of government budget constraint, we perform an illustrative analysis on the Italian case, investigating the consequences on the main public finance aggregates of the adoption of a fiscal policy rule responding to past real debt/GDP ratio. Such a rule, firmly grounded in the economic analysis, would allow the reduction of Italy's outstanding stock of debt without requiring the strict adherence to the 3% criterion for deficit/GDP ratio, as prescribed by SGP. We perform a forecasting exercise under five alternative scenarios and analyze the details of a structural debt reduction strategy with alternative yearly step.
Marattin L., Marzo M. (2009). A Note on the (Un)Pleasant Arithmetic of Fiscal Policy: the Case of Italian Public Debt. ECONOMIC NOTES, 38, 169-183 [10.1111/j.1468-0300.2009.00212.x].
A Note on the (Un)Pleasant Arithmetic of Fiscal Policy: the Case of Italian Public Debt
MARATTIN, LUIGI;MARZO, MASSIMILIANO
2009
Abstract
Using the simple arithmetic of government budget constraint, we perform an illustrative analysis on the Italian case, investigating the consequences on the main public finance aggregates of the adoption of a fiscal policy rule responding to past real debt/GDP ratio. Such a rule, firmly grounded in the economic analysis, would allow the reduction of Italy's outstanding stock of debt without requiring the strict adherence to the 3% criterion for deficit/GDP ratio, as prescribed by SGP. We perform a forecasting exercise under five alternative scenarios and analyze the details of a structural debt reduction strategy with alternative yearly step.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
