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Public expenditure in time of crisis: are Italian policymakers choosing the right mix?

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  • Francesco Prota

    (Università degli Studi di Bari “Aldo Moro”)

  • Maria Jennifer Grisorio

    (Agenzia Regionale per la Tecnologia e l’Innovazione, ARTI)

Abstract

In the ‘austerity debate’ a crucial issue is the composition of fiscal adjustment. This article provides empirical evidence on the relationship between economic crisis episodes and composition of public expenditure by examining the impact of economic crises on the share of different types of public spending in total public expenditure in the Italian regions. Our results suggest that fiscal consolidation strategies have not had growth-friendly expenditure composition. The crisis aggravated budgetary trade-offs by reducing the share of discretionary spending such as public investments.

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  • Francesco Prota & Maria Jennifer Grisorio, 2018. "Public expenditure in time of crisis: are Italian policymakers choosing the right mix?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 337-365, August.
    • Handle: RePEc:spr:epolit:v:35:y:2018:i:2:d:10.1007_s40888-018-0124-4
    DOI: 10.1007/s40888-018-0124-4
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    3. Adolfo Maza & José Villaverde & María Hierro, 2019. "The 2017 Regional Election in Catalonia: an attempt to understand the pro-independence vote," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 1-18, April.
    4. Shobande Olatunji Abdul & Shodipe Oladimeji Tomiwa, 2019. "New Keynesian Liquidity Trap and Conventional Fiscal Stance: An Estimated DSGE Model," Economics and Business, Sciendo, vol. 33(1), pages 152-169, January.
    5. Shobande Olatunji Abdul, 2020. "Fiscal Rule in Africa," Open Economics, De Gruyter, vol. 3(1), pages 112-120, January.
    6. Floriana Cerniglia & Enzo Dia & Andrew Hughes Hallett, 2019. "Tax vs. Debt Management Under Entitlement Spending: a Multicountry Study," Open Economies Review, Springer, vol. 30(3), pages 425-443, July.
    7. Petraglia, Carmelo & Pierucci, Eleonora & Scalera, Domenico, 2020. "Interregional redistribution and risk sharing through public budget. The case of Italy in times of crisis (2000–2016)," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 162-169.
    8. Chiara Assunta Ricci & Sergio Scicchitano, 2021. "Decomposing changes in income polarization by population group: what happened during the crisis?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 235-259, April.

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    More about this item

    Keywords

    Economic crisis; Composition of government expenditure; Panel data;
    All these keywords.

    JEL classification:

    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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