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Italy: toward a growth-friendly fiscal reform

Author

Listed:
  • Michal Andrle

    (International Monetary Fund)

  • Shafik Hebous

    (International Monetary Fund)

  • Alvar Kangur

    (International Monetary Fund)

  • Mehdi Raissi

    (International Monetary Fund)

Abstract

Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balance by 2020, although concrete, high-quality measures to meet the target are yet to be specified. This paper seeks to contribute to the discussion by (1) assessing spending patterns to identify areas for savings; (2) evaluating the pension system; (3) analyzing the scope for revenue rebalancing; and (4) putting forward a package of spending cuts and tax rebalancing that is growth friendly and inclusive, could have limited near-term output costs, and would achieve a notable reduction in public debt over the medium term. Such a package could help the authorities balance the need to bring down public debt and, thus, reduce vulnerabilities while supporting the economic recovery.

Suggested Citation

  • Michal Andrle & Shafik Hebous & Alvar Kangur & Mehdi Raissi, 2021. "Italy: toward a growth-friendly fiscal reform," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 385-420, April.
  • Handle: RePEc:spr:epolit:v:38:y:2021:i:1:d:10.1007_s40888-020-00198-1
    DOI: 10.1007/s40888-020-00198-1
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    Cited by:

    1. Michal Andrle & Mr. Alvar Kangur & Mr. Mehdi Raissi, 2018. "Italy: Quantifying the Benefits of a Comprehensive Reform Package," IMF Working Papers 2018/060, International Monetary Fund.
    2. Paolo Caro, 2020. "Decomposing Personal Income Tax Redistribution with Application to Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 113-129, March.
    3. D'ANDRIA Diego & DEBACKER Jason & EVANS Richard W. & PYCROFT Jonathan & ZACHLOD-JELEC Magdalena, 2021. "Taxing income or consumption: macroeconomic and distributional effects for Italy," JRC Working Papers on Taxation & Structural Reforms 2021-13, Joint Research Centre (Seville site).
    4. Nicola Curci & Marco Savegnago, 2019. "Shifting taxes from labour to consumption: the efficiency-equity trade-off," Temi di discussione (Economic working papers) 1244, Bank of Italy, Economic Research and International Relations Area.
    5. Ernesto Crivelli & Emile Cammeraat, 2020. "Toward a Comprehensive Tax Reform for Italy," IMF Working Papers 2020/037, International Monetary Fund.
    6. Carlo Mazzaferro, 2018. "Is the Italian NDC pension system really sustainable?Parameters’ design and consistency," Center for the Analysis of Public Policies (CAPP) 0164, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    7. Zhiwei Liu & Yonglei Fang & Lei Ma, 2022. "A Study on the Impact of Population Age Structure Change on Economic Growth in China," Sustainability, MDPI, vol. 14(7), pages 1-15, March.
    8. Daniele Franco & Pietro Tommasino, 2020. "Lessons From Italy: A Good Pension System Needs an Effective Broader Social Policy Framework," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(2), pages 73-81, March.

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    More about this item

    Keywords

    Fiscal reform; Growth-friendly fiscal policy; Public pensions; Italy;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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