We investigate the sustainability of Italy’s public finances from 1862 to 2012 adopting a non-linear perspective. Specifically, we employ the smooth transition regression approach to explore the scope for non-linear fiscal adjustments of primary surpluses in response to the accumulation of...

We introduce endogenous growth in a standard NK model with staggered prices and wages. We find that the source of nominal rigidities, the shock persistence and the type of Taylor rule affect the relationship between monetary volatility and growth.