Italy, the fiscal dominance model, and the gold standard age
AbstractThe paper links money supply to the state budget deficit in the Italian historical context. The process of monetization of government deficit is analysed and is related both to the fixity of the exchange rate and free capital mobility typical of the 1860-1913 period. The empirical evidence supporting the view of Italy “shadowing” gold is discussed and the effect of government financing on money supply is tested. The conlusion discusses the implications of the model and of the empirical evidence for the interpretation of the Gold Standard.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37155.
Date of creation: 1997
Date of revision:
Monetary theory; Gold Standard; Fiscal theory; Economic History of Italy;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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