Sustainability and Determinants of Italian Public Deficits before and after Maastricht

Abstract

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Impact of European Integration on Institutional Development

“…Bayar and Smeets (2009) and Ballabriga and Martinez-Mongay (2007) also find that the Maastricht Treaty had a positive effect on fiscal balances. In contrast, Galli and Padovano (2008) and Mink and Haan (2005) do not find support for this thesis. Eijffinger and Stadhouders (2003) examine the relationship among inflation, the institutional design of monetary institutions, and the rule of law.…”

Nonlinearities and the Sustainability of the Government's Intertemporal Budget Constraint

“…Previous empirical evidence on the sustainability of the Italian IBC is controversial. Feve and Henin (2000), Santos Bravo and Silvestre (2002), Afonso (2005), and Galli and Padovano (2008), all find that the Italian government's finances are on an unsustainable path. A different conclusion is reached by Greiner, Köller, and Semmler (2007) and Uctum, Thurston, and Uctum (2006), who provide evidence in favor of the sustainability of the Italian government's IBC, in spite of the high levels of public debt.…”

Fiscal Policy and Public Debt Dynamics in Italy, 1861-2009

“…7 ADF, PP and KPSS tests give however unambiguous results, in favor of the non-stationarity hypothesis, over the sample up to the 1991 global recession and the Maastricht Treaty (from 1861 to 1990), even excluding world war-time periods, and over the post-World War II sample (from 1948 to 2009). Galli and Padovano (2008) also find evidence of non-stationarity over the period from 1950 to 2002.…”