The dynamics of Italian public debt: Alternative paths for fiscal consolidation

Casadio, Paolo and Paradiso, Antonio and Rao, B. Bhaskara (2011): The dynamics of Italian public debt: Alternative paths for fiscal consolidation.

Abstract

This paper analyses possible targets for the Italian debt-to-GDP ratio with a small macroeconomic model. The role of international macroeconomic variables such as the US GDP growth, prices of raw materials, EUR/USD exchange rate, and ECB monetary policy stance and domestic policy instruments is analyzed in the debt dynamics. We find that external conditions play a fundamental role for the Italian fiscal consolidation. To reach a target of 100% of debt-to-GDP ratio by 2020, a further growth sustaining policy has to be implemented.

• Item Type: MPRA Paper
• Language: English
• Keywords: Debt to GDP Ratio, Italian Economy, International Factors, SUR.
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C30 - General; H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt ; Debt Management ; Sovereign Debt

References

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