Optimal fiscal action in an economy with sovereign Premia and without monetary independence : an application to Italy

Apostolis Philippopoulos; Petros Varthalitis; Vanghelis Vassilatos

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. -- feedback policy rules ; New Keynesian ; sovereign premia

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Year of publication:	2013
Authors:	Philippopulos, Apostolēs ; Varthalitis, Petros ; Vassilatos, Vanghelis
Publisher:	München : CESifo
Subject:	Italien \| Italy \| Öffentliche Schulden \| Public debt \| Finanzpolitik \| Fiscal policy \| Theorie \| Theory \| Zentralbankunabhängigkeit \| Central bank independence \| Haushaltskonsolidierung \| Fiscal consolidation