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.

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Year of publication:	2013
Authors:	Philippopoulos, Apostolis ; Varthalitis, Petros ; Vassilatos, Vanghelis
Institutions:	CESifo
Subject:	feedback policy rules \| New Keynesian \| sovereign premia

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Extent:	application/pdf
Series:	CESifo Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 4199
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:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010639426