The Policy Response to Macroeconomic and Fiscal Imbalances in Italy in the Last Fifteen Years

PSL Quarterly Review, Vol. 67, No. 268, pp. 55-103, anno 2014

49 Pages Posted: 19 Jun 2014

Multiple version iconThere are 2 versions of this paper

Date Written: March 15, 2014

Abstract

This paper reviews the main macroeconomic trends and the debate on policy priorities in Italy since the advent of EMU. It argues that, in the decade up to the outbreak of the global crisis (1998-2007), in Italy the reform process came to a virtual standstill and fiscal policy was inconsistent with the commitments taken on at the European level. The paper suggests that the lack of resolute policy reactions to the institutional dysfunctions and structural weaknesses was due to the fragmentation of the political constituency, while a variety of favourable contingent factors masked the difficulties of the productive system. Had Italy been better positioned in terms of public finances and structural features in 2007, some of the adverse effects of the global and sovereign crises would have been avoided.

Keywords: EMU, fiscal policy, macroeconomic imbalances, global crisis

JEL Classification: E6, H3, K0, N1

Suggested Citation

Bassanetti, Antonio and Bugamelli, Matteo and Momigliano, Sandro and Sabbatini, Roberto and Zollino, Francesco, The Policy Response to Macroeconomic and Fiscal Imbalances in Italy in the Last Fifteen Years (March 15, 2014). PSL Quarterly Review, Vol. 67, No. 268, pp. 55-103, anno 2014. Available at SSRN: https://ssrn.com/abstract=2456249

Antonio Bassanetti (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Matteo Bugamelli

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Sandro Momigliano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Roberto Sabbatini

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Francesco Zollino

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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