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A scientific note on the Italian Mini BOTs and the proposal of the CCCFs

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  • Saccal, Alessandro

Abstract

This note shows that the Italian Mini BOTs proposed in 2019 bore the potential neither to become Italian legal tender nor to practically increase Italian government debt, but to practically cause a mere reduction in taxation and thence in government spending or transfers. Since the Eurozone practically excluded an increase in government debt or a monetisation of that which the Italian treasury owed certain firms the Italian Mini BOTs, precisely because of the probable uncertainty associated with them, would have (i) stimulated expenditure more than a taxation rebate to the said firms and (ii) facilitated Italy’s hypothetical abandonment of the Eurozone, seemingly being the one and only reason for which all of their critics opposed them. This note in fact proposes the direct emission of Italian taxation credit certificates endowed with a further reduction in taxation conditional on their use for consumption, termed “Certificati a Consumo di Compensazione Fiscale”, thereby attaining to the said two ends as well as to that of alleviating the liquidity shortage on the part of firms and the private sector at large without recourse to monetary policy.

Suggested Citation

  • Saccal, Alessandro, 2023. "A scientific note on the Italian Mini BOTs and the proposal of the CCCFs," MPRA Paper 115857, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115857
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    Keywords

    CCCFs; government budget constraint; government debt; government spending; Italian Mini BOTs; miniature treasury bills; money supply; public finance; taxation; taxation credit certificates; transfers.;
    All these keywords.

    JEL classification:

    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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