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Effects of fiscal policy in the Northern and Southern regions of Italy

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  • Paolo Piacentini
  • Stefano Prezioso
  • Giuseppina Testa

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.

Suggested Citation

  • Paolo Piacentini & Stefano Prezioso & Giuseppina Testa, 2016. "Effects of fiscal policy in the Northern and Southern regions of Italy," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 747-770, November.
    • Handle: RePEc:taf:irapec:v:30:y:2016:i:6:p:747-770
    DOI: 10.1080/02692171.2016.1208738
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    References listed on IDEAS

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    1. Michael Olive, 2002. "Price and Markup Behaviour in Manufacturing," Books, Edward Elgar Publishing, number 2463.
    2. Giovanni Callegari & Mr. Giovanni Melina & Nicoletta Batini, 2012. "Successful Austerity in the United States, Europe and Japan," IMF Working Papers 2012/190, International Monetary Fund.
    3. Padoa Schioppa, Fiorella Kostoris, 1999. "Regional Aspects of Unemployment in Europe and in Italy," CEPR Discussion Papers 2108, C.E.P.R. Discussion Papers.
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    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. Paolo Piacentini, 2018. "The Demand Side vs. the Supply Side in the Analysis of Employment: The Potential for the Use of 'Employment Multipliers'," Economia & lavoro, Carocci editore, issue 1, pages 105-120.
    3. Francesco Zezza & Gennaro Zezza, 2023. "A prototype regional stock‐flow consistent model," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 266-287, May.
    4. 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.
    5. 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.
    6. Matteo Deleidi & Davide Romaniello & Francesca Tosi, 2021. "Quantifying fiscal multipliers in Italy: A Panel SVAR analysis using regional data," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1158-1177, October.

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