IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v74y2022i2p359-381..html
   My bibliography  Save this article

Quantifying multipliers in Italy: does fiscal policy composition matter?
[The macroeconomic effects of public investment: Evidence from advanced economies]

Author

Listed:
  • Matteo Deleidi

Abstract

This article aims to estimate fiscal multipliers in Italy by assessing the effect of an increase in government expenditure and taxes on the Gross Domestic Product (GDP). By applying structural vector autoregressive modelling to Italian quarterly data for the 1995–2019 period, I show that expansionary fiscal policies produce positive effects on the GDP level. Estimated spending multipliers are higher than 1, and when government investment and consumption are compared, findings show that government investment has a larger effect on GDP than government consumption. Estimated tax multipliers are lower than 1, and tax-based policies are less effective in stimulating GDP than expenditure-based fiscal plans. My findings strongly support the Keynesian perspective and indicate that Italy should increase public investments considerably in order to foster economic growth.

Suggested Citation

  • Matteo Deleidi, 2022. "Quantifying multipliers in Italy: does fiscal policy composition matter? [The macroeconomic effects of public investment: Evidence from advanced economies]," Oxford Economic Papers, Oxford University Press, vol. 74(2), pages 359-381.
    • Handle: RePEc:oup:oxecpp:v:74:y:2022:i:2:p:359-381.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/oep/gpab028
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Simone Lucidi, 2023. "The misalignment of fiscal multipliers in Italian regions," Regional Studies, Taylor & Francis Journals, vol. 57(10), pages 2073-2086, October.
    2. Matteo Ficarra, 2024. "Public Spending, Green Growth, and Corruption: a Local Fiscal Multiplier Analysis for Italian Provinces," IHEID Working Papers 11-2024, Economics Section, The Graduate Institute of International Studies.
    3. Sébastien Charles, 2022. "Fiscal multipliers and policies in France and Italy: What has happened in the decade after the Great Recession?," Economics Bulletin, AccessEcon, vol. 42(3), pages 1706-1716.
    4. Di Domenico, Lorenzo & Gahn, Santiago José & Romaniello, Davide, 2024. "Testing the Waters of Positive Hysteresis: The Effects of Autonomous Demand Shocks on Inflation, Accumulation, and Labor in the US Economy," Centro Sraffa Working Papers CSWP64, Centro di Ricerche e Documentazione "Piero Sraffa".
    5. Giovanna Ciaffi & Matteo Deleidi & Michele Capriati, 2024. "Government spending, multipliers, and public debt sustainability: an empirical assessment for OECD countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(2), pages 521-542, July.
    6. Giovanna Ciaffi & Matteo Deleidi & Mariana Mazzucato, 2024. "Measuring the macroeconomic responses to public investment in innovation: evidence from OECD countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(2), pages 363-382.
    7. Giovanna Ciaffi & Matteo Deleidi & Enrico Sergio Levrero, 2022. "The Macroeconomic Impact of Public Spending in Research and Development: An Initial Exploration for G7 and 15 Oecd Countries," Bulletin of Political Economy, Bulletin of Political Economy, vol. 16(1), pages 1-19, June.
    8. Barbieri Góes, Maria Cristina & Deleidi, Matteo, 2022. "Output determination and autonomous demand multipliers: An empirical investigation for the US economy," Economic Modelling, Elsevier, vol. 116(C).

    More about this item

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:74:y:2022:i:2:p:359-381.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.