IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

The Rise and Fall of Inflation in Italy in the 1990s: A Comparative Analysis of Four Different Explanations

Listed author(s):
  • Eugenio Gaiotti


    (Bank of Italy, Research Department)

  • Andrea Gavosto

    (Fiat, Economic Unit)

  • Giuseppe Grande

    (Bank of Italy, Research Department)

The paper considers four explanations of the recent turnaround in inflation in Italy: the Exchange rate channel that was the centerpiece of the monetary policy strategy in the preceding decade; domestic aggregate demand; inflation expectations and “fiscal dominance,” that have both been a central issue in the recent debate on monetary policy effectiveness. The weight of each story is assessed by way of a vector auto-regression. The results suggest that inflation expectations did matter as determinants of actual inflation; in contrast, changes in the default premium on the public debt are not found to have had a significant effect on inflation, thus rejecting the assumption of “fiscal dominance”. The two episodes of sharp exchange rate depreciation (in 1992 and 1995) were a major factor in pushing prices up; however, the expectational climate and demand shocks also appear to have played an important role.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 57 (1998)
Issue (Month): 3-4 (December)
Pages: 297-324

in new window

Handle: RePEc:gde:journl:gde_v57_n3-4_p297-324
Contact details of provider: Postal:
via Sarfatti, 25 - 20136 Milano (Italy)

Phone: 0039-02-58365306
Web page:

Order Information: Web: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:gde:journl:gde_v57_n3-4_p297-324. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Erika Somma)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.