Canelli, R, Fontana, G orcid.org/0000-0002-8055-5326, Realfonzo, R et al. (1 more author) (2021) Are EU policies effective to tackle the Covid-19 crisis? The case of Italy. Review of Political Economy, 33 (3). pp. 432-461. ISSN 0953-8259
Abstract
In response to the economic crisis unleashed by the Covid-19 pandemic, the EU authorities have launched extraordinary fiscal and monetary measures in support of member states. The impact of these measures is of great significance for Italy, the EU third-largest economy, which as a result of the pandemic has suffered a dramatic decline in GDP, and a further rise in the government debt to GDP ratio. Building on a stock-flow consistent, structural macro-econometric model, this paper shows that the currently planned EU measures are insufficient to boost the recovery of the Italian economy, and to ensure the sustainability of its government debt. The paper also assesses two potential alternative policies. A fiscal consolidation (i.e. austerity) policy would exacerbate the decline in GDP and further deteriorate the government debt to GDP ratio. By contrast, a money-financed fiscal stimulus policy could lead the Italian economy on a path of sustainable growth, with positive outcomes for employment and government finances.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. |
Keywords: | Covid-19; Next Generation EU; government debt sustainability; Italy; SFC model; money-financed fiscal policy |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 14 Jan 2021 10:04 |
Last Modified: | 09 Sep 2022 00:17 |
Status: | Published |
Publisher: | Taylor & Francis |
Identification Number: | 10.1080/09538259.2021.1876477 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:170000 |
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Filename: ROPE 2021.pdf
Filename: Are EU Policies Effective to Tackle the Covid 19 Crisis The Case of Italy.pdf
Licence: CC-BY-NC-ND 4.0