In a stylised framework of fiscal policy determination that considers both structural targets and cyclical factors, we find significant cyclical asymmetry in the behaviour of fiscal variables in a sample of fourteen EU countries from 1970 to 2004, with budgetary balances (both overall and...

In this paper we present a stylised framework of fiscal policy determination that considers both structural targets and cyclical factors. Applying this framework to a sample of 16 OECD countries, we find evidence of significant asymmetry in the reaction of fiscal policy to positive and negative...

The Stability and Growth Pact sets a medium-term target for fiscal policy of a budgetary position 'close to balance or in surplus'. This addition to the deficit rule defined by the Maastricht Treaty has been interpreted as an attempt to reconciliate the objective of sound public finances with...

The Stability and Growth Pact sets a medium-term target for fiscal policy of a budgetary position "close to balance of in surplus". This addition to the deficit rule defined by the Maastricht Treaty has been interpreted as an attempt to reconcile the objective of sound public finances with the...

We examine the public debt management problem with respect to the maturity mix of new issues in a mean-variance framework. After identifying the main determinants of the long-run target (strategy), we focus on which interest rate conditions allow for a temporary deviation (tactics). The study is...

The volume collects the essays presented at the 12th Workshop on Public Finance organised by Banca d'Italia in Perugia on 25-27 March 2010. The workshop focused on the implications for fiscal policy analysis of the 2008-09 recession, the most severe at global level since the Great Depression....

We study the effects of fiscal policy on macroeconomic developments in Italy over the period 1982-2010 with a Structural Vector Autoregression (SVAR) model. We include public debt and impose the government budget constraint in the estimation. In contrast with previous research we also include...

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...

This paper briefly reviews the literature on fiscal multipliers and then presents results for the Italian economy obtained by simulating a dynamic general equilibrium model that allows for the possibility (a) that the zero lower bound may be binding and (b) that the initial public debt-to-GDP...

We test whether the sharp increase in sovereign spreads of euro area countries with respect to Germany after the explosion of the Greek crisis was due to deteriorating macroeconomic and fiscal fundamentals or to some form of financial contagion. Our analysis includes indicators of domestic and...