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Beyond the austerity dispute: new priorities for fiscal policy

Author

Listed:
  • Luca Agnello

    () (Universita' degli studi di Palermo)

  • Nikola Altiparmakov

    () (Fiscal council republic of Serbia)

  • Michal Andrle

    () (IMF)

  • Maria Grazia Attinasi

    () (ECB)

  • Jan Babecký

    () (Czech National Bank)

  • Salvador Barrios

    () (European Commission)

  • John Bluedorn

    () (IFM)

  • Vladimir Borgy

    () (Banque de France)

  • Othman Bouabdallah

    () (ECB)

  • Andries Brandsma

    () (European Commission)

  • Adi Brender

    () (Bank of Ireland)

  • Vítor Castro

    () (Universidade de Coimbra)

  • Cristina Checherita-Westphal

    () (ECB)

  • Jerome Creel

    () (Paris Institute of Political Studies)

  • Jasper De Jong

    () (DNB)

  • Luiz de Mello

    () (OECD)

  • Francesco Di Comite

    () (European Commission)

  • Olga Diukanova

    () (European Commission)

  • Luc Eyraud

    () (IMF)

  • Serena Fatica

    () (European Commission)

  • Marien Ferdinandusse

    () (ECB)

  • Davide Fiaschi

    () (Universita' di Pisa)

  • Maura Francese

    () (IMF)

  • Maximilian Freier

    () (ECB)

  • Josip Funda

    () (Hrvatska Narodna Banka)

  • Davide Furceri

    ()

  • Paul Hubert

    () (Science PO)

  • Anna Iara

    () (European Commission)

  • Joao Jalles

    () (IMF)

  • Tidiane Kinda

    () (IMF)

  • Gabor P.Kiss

    () (Magyar Nemzeti Bank)

  • ya Koeva-Brooks

    () (IMF)

  • Martin Larch

    () (European Commission)

  • Jesús López Rodríguez

    () (European Commission)

  • Prakash Loungani

    () (IMF)

  • d'Artis Kancs

    () (European Commission)

  • Sandro Momigliano

    () (Bank of Italy)

  • Carlos Mulas-Granados

    ()

  • Ludovit Odor

    ()

  • George Palaiodimos

    () (Bank of Greece)

  • Lucio Pench

    ()

  • Damiaan Persyn

    () (University of Leuven)

  • Álvaro Pina

    () (OECD)

  • Lesley Potters

    () (European Commission)

  • Doris Prammer

    () (OENB)

  • Jonathan Pycroft

    () (European Commission)

  • Ernesto Rezk

    () (Universidad Nacional de Córdoba)

  • Marzia Romanelli

    () (Bank of Italy)

  • Fabrizio Saccomanni

    ()

  • Francesco Saraceno

    () (Sciences PO)

  • Gerd Schwartz

    () (IMF)

  • Ricardo Sousa

    () (Universidade do Minho)

  • Martino Tasso

    () (Bank of Italy)

  • Teresa Ter-Minassian

    () (IMF)

  • Pietro Tommasino

    () (Bank of Italy)

  • Anke Weber

    () (IMF)

  • Jochen Zimmer

    () (Bundesbank)

Abstract

The workshop aimed at moving forward the fiscal policy debate, which in the crisis years was unavoidably focused on how to regain fiscal credibility and to implement sizable and fast consolidation plans. Four main themes have been proposed for the debate during the workshop. First, the two-way link between fiscal consolidation and inequality, with the idea that consolidation efforts cannot be successful in the long run if they entail a socially unsustainable increase in inequality. Second, the importance of preserving, even in contexts in which the fiscal policy stance is necessarily restrictive, growth-enhancing public investments. Third, the challenges posed to fiscal management by a low inflation context, taking into account that a subdued price dynamics not only makes the real burden of debt heavier, but it also has subtle effects, at least in the short term, on several budgetary items. Finally, the need for a simpler and more appropriate set of rules for the governance of the EMU. The latter topic was also the object of the high-level panel at the end of the workshop. While differences in emphasis emerged among the panellists, they agreed that the current framework could be streamlined, and – more importantly – that no set of rules can work if trust and a sense of sharing a common objective is not rebuilt among the Member States.

Suggested Citation

  • Luca Agnello & Nikola Altiparmakov & Michal Andrle & Maria Grazia Attinasi & Jan Babecký & Salvador Barrios & John Bluedorn & Vladimir Borgy & Othman Bouabdallah & Andries Brandsma & Adi Brender & Vít, 2016. "Beyond the austerity dispute: new priorities for fiscal policy," Workshop and Conferences 20, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:workpa:sec_20
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/collana-seminari-convegni/2016-0020/Beyond_the_Austerity_Dispute_-_New_Priorities_for_Fiscal_Policy.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Gini index; fiscal consolidation; fiscal expansion; narrative approach; cyclically-adjusted primary balance; expenditure-based; tax-based; recession; inequality; distribution; factor income distribution; wage share; measure of individual welfare; non-parametric methods; polarization; distribution dynamics; inequality; income inequality; fiscal stimuli; political (in)stability; wealth distribution; wealth taxation; capital income taxation; household data; public investment; private investment; elasticity; production function; RHOMOLO; multiregional spatial CGE; cohesion policy; fiscal policy; inflation shock; spending indexation; fiscal drag; debt sustainability; mandatory pensions; pension contribution; tax incidence; rational behavior; smoothing lifetime income; fiscal framework; fiscal indicators; cyclical adjustment; fiscal council; fiscal governance; fiscal policy; fiscal rules; european economic and monetary union;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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