Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy
Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 1
26 Pages Posted: 5 Jun 2014
Date Written: February 28, 2014
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 slight improvements on the external position of the economy only in the short run, 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