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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  

Barbara Annicchiarico

University of Rome, Tor Vergata - Department of Economics and Finance

Fabio Di Dio

Sogei S.p.a.

Francesco Felici

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

Multiple version iconThere are 2 versions of this paper

Date Written: February 28, 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 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

Annicchiarico, Barbara and Di Dio, Fabio and Felici, Francesco, Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy (February 28, 2014). Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 1. Available at SSRN: https://ssrn.com/abstract=2445837

Barbara Annicchiarico (Contact Author)

University of Rome, Tor Vergata - Department of Economics and Finance ( email )

Rome, I-00133
Italy

Fabio Di Dio

Sogei S.p.a. ( email )

Via Mario Carucci n. 99 e 85
Roma, 00143
Italy
+39068544 9092 (Phone)

Francesco Felici

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

Via XX Settembre, 97
Rome, 00187
Italy
00390647614197 (Phone)

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