Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy

Annicchiarico, Barbara; Di Dio, Fabio; Felici, Francesco

doi:10.2139/ssrn.2422910

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Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy

CEIS Working Paper No. 311

41 Pages Posted: 10 Apr 2014 Last revised: 27 Sep 2014

See all articles by Barbara Annicchiarico

Francesco Felici

Government of the Italian Republic (Italy) - Ministry of Economy and Finance - Department of the Treasury

There are 2 versions of this paper

Date Written: August 2014

Abstract

We study the potential impact of fiscal devaluation policies on the Italian economy using IGEM, a dynamic general equilibrium model for the Italian economy developed at the Department of Treasury of the Italian Ministry of the Economy and Finance. The simulations show that fiscal devaluation policies are likely to produce short-run slight improvements on the external position of the economy, while the output gains seem to persist in the long run. Non-negligible distributional effects across households are also observed, since taxation on consumption tends to be regressive.

Keywords: Fiscal Devaluation, DGE, Structural Reforms, Italy

JEL Classification: E10, C50, E60

Suggested Citation: Suggested Citation

Annicchiarico, Barbara and Di Dio, Fabio and Felici, Francesco, Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy (August 2014). CEIS Working Paper No. 311, Available at SSRN: https://ssrn.com/abstract=2422910 or http://dx.doi.org/10.2139/ssrn.2422910