We derive the optimal fiscal policy for a government that is committed to honoring its debt but faces investors which fear a sovereign default. We assume that investors are able to learn from new evidence, as in Marcet and Sargent (1989), so that they can gradually correct their overly...

The paper examines the development of Italy�s public finances after the consolidation period 1992-97, which secured participation in the European Monetary Union from the outset. The �structural� developments in the main budgetary components are assessed, excluding the effects of...

The aim of this work is to identify the determinants of health spending differentials among Italian regions, which could highlight the existence of potential margins for savings. The analysis exploits a dataset for the panel of the 21 Italian regions starting in the early 1990s and ending in...

The experience of other successful monetary unions and economic theory suggest that the euro area would benefit from the establishment of a supranational fiscal capacity. Institutional reforms prompted by the crisis (e.g., the European Stability Mechanism and the banking union) are introducing...

The paper proposes a measure of countries' welfare based on individuals' lifetime utility and applies it to a large sample of countries in the period 1960-2000. Even though welfare inequality across countries appeared stable, the distribution dynamics points out the emergence of three clusters....