Optimal Fiscal Action in an Economy with Sovereign Premia and without Monetary Independence: An Application to Italy

We welfare rank various tax-spending policies. The setup is a New Keynesian model of a semi-small open economy featuring sovereign risk premia and loss of monetary policy independence. The model is calibrated to match data from the Italian economy 2001-2011. We compute various optimized state-contingent tax-spending policy rules when the policy aim is shock stabilization and/or debt consolidation.

MoreLess

Year of publication:	2013
Authors:	Philippopoulos, Apostolis ; Varthalitis, Petros ; Vassilatos, Vanghelis
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	feedback policy rules \| New Keynesian \| sovereign premia

More details

Series:	CESifo Working Paper ; 4199
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	742464229 [GVK] hdl:10419/72558 [Handle] RePec:ces:ceswps:_4199 [RePEc]
Classification:	E60 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook. General ; F30 - International Finance. General ; H60 - National Budget, Deficit, and Debt. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010293909