Effects of fiscal policy in the Northern and Southern regions of Italy |
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Authors: | Paolo Piacentini Stefano Prezioso Giuseppina Testa |
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Institution: | 1. Dipartimento di Scienze Sociali ed Economiche, Università degli Studi di Roma “La Sapienza”, Piazzale Aldo Moro 5, 00185 Roma;2. SVIMEZ, Associazione per lo sviluppo dell’industria nel Mezzogiorno, via di Porta Pinciana, 6, 00187 Roma;3. Dipartimento di Economia, Università degli Studi di Foggia, Largo Papa Giovanni Paolo II, 71100 Foggia |
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Abstract: | This paper contributes to a growing body of work within ‘fiscal policy studies,’ investigating the recent role of fiscal policy on the Italian economy. Using annual data collected on a regional basis, this study estimates and compares the (impact and cumulative) fiscal multipliers across the North and the South—the less developed area—of Italy. With recourse to a simultaneous equation model for the two macro-areas of Italy, it estimates the overall impact of the measures of budget consolidation policies during the period 2011–2013. Our analysis reveals that tax increases and, with a greater impact, spending cuts, hit the South harder compared to the North. |
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Keywords: | Tax multiplier government spending multiplier fiscal policy |
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