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Indicators and Tests of Sustainability: The Italian Case

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  • Matteo Formenti

    ()
    (Università di Roma "Tor Vergata")

Abstract

The issue of sustainability of Italian fiscal policy in the period 1970-2006 is studied with two instruments: indicators and tests. The indicators Primary Gap, Tax Gap developed by Chouraqui et al. (1990) and S2 by the European Commission show a nonsustainable fiscal policy. Tests of sustainability following Trehan and Walsh (1988), Hakkio and Rush (1991) and Bohn (2008) show an opposite result accepting the sustainability path of fiscal variables. According to the strategy proposed by De Luzenberger and Marini (1993) a Chow-type test, that confirms a systematic change of fiscal policy in 1992-1993, permits to discern the two conflicting results in favour of the indicators’ response.

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Bibliographic Info

Article provided by SIPI Spa in its journal Rivista di Politica Economica.

Volume (Year): 98 (2008)
Issue (Month): 6 (November-December)
Pages: 123-160

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Handle: RePEc:rpo:ripoec:v:98:y:2008:i:6:p:123-160

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Keywords: fiscal sustainability; fiscal indicators and tests of sustainability; Chow test;

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Citations

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Cited by:
  1. Pica, Federico & Villani, Salvatore, 2012. "Debito, Mezzogiorno e sviluppo. A trivial exercise
    [Sovereign Debt Sustainability, Mezzogiorno and Economic Growth. A Trivial Exercise]
    ," MPRA Paper 43199, University Library of Munich, Germany, revised 28 Nov 2012.
  2. Mariolis, Theodore & Papoulis, Κostas, 2010. "Δυναμική Του Χρέους, ‘Δίδυμα Ελλείμματα’ Και Διεθνής Ανταγωνιστικότητα Της Ελληνικής Οικονομίας
    [Debt dynamics,
    ," MPRA Paper 23173, University Library of Munich, Germany.
  3. Mariolis, Theodore & Papoulis, Κostas, 2010. "Δυναμική Του Δημοσίου Χρέους, Οικονομική Πολιτική Και Κοινωνική Συνοχή Στην Ελλάδα: Μία Σημείωση
    [Public debt dynam
    ," MPRA Paper 28551, University Library of Munich, Germany.

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