Italy: Toward a Growth-Friendly Fiscal Reform
39 Pages Posted: 5 Apr 2018
Date Written: March 2018
Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balanceby 2020, although concrete, high-quality measures to meet the target are yet to be specified.This paper seeks to contribute to the discussion by (i) assessing spending patterns to identifyareas for savings; (ii) evaluating the pension system; (iii) analyzing the scope for revenuerebalancing; and (iv) putting forward a package of spending cuts and tax rebalancing that isgrowth friendly and inclusive, could have limited near-term output costs, and would achievea notable reduction in public debt over the medium term. Such a package could help theauthorities balance the need to bring down public debt and, thus, reduce vulnerabilities whilesupporting the economic recovery.
Keywords: Europe, Italy, Growth-friendly fiscal policy, public pensions, dynamic stochastic general equilibrium models, Forecasting and Simulation, Social Security and Public Pensions, Italy
JEL Classification: E27, E62, H55
Suggested Citation: Suggested Citation