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The Debate on the Crisis: Recent Reappraisals of the Concept of Functional Finance

  • Giuseppe Mastromatteo

    ()

    (DISCE, Università Cattolica)

This paper seeks to map out the possible paths of effective management of public action – including the possibility of deficit-financed action – designed, firstly, to short-term problems, with an immediate impact against economic depression, and secondly, to the medium-long-term perspective, aiming to assure that the extent and role of policies enacted is sustainable over time. This analytical approach underscores the theoretical validity of an active role of fiscal policy in helping to overcome severe recessions, provided that this policy is underpinned by appropriate institutional rules and a judicious application of the method of functional finance. This approach implies that the economic evaluation of deficit financed projects and careful selection of meritorious projects should be oriented towards goals of collective interest. Also, such projects should always pursue the goal of increasing the productivity of the economic system, with a view to achieving sustainable growth and, over time, allowing the debt to be suitably refinanced, managed and reduced by means of budget surpluses obtained during economic upswings.

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File URL: http://istituti.unicatt.it/economia_finanza_1051111.pdf
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Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia e Finanza with number ief0105.

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Length: 24
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:ctc:serie3:ief0105
Contact details of provider: Web page: http://www.unicatt.it/Istituti/EconomiaFinanza
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  15. Giuseppe Mastromatteo, 2011. "The Debate on the Crisis: Recent Reappraisals of the Concept of Functional Finance," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0105, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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  19. Zeno Rotondi & Giacomo Vaciago, 2007. "Lessons from the ECB experience: Frankfurt still matters!," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0070, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  20. Angelo Baglioni & Andrea Monticini, 2008. "The Intraday Price of Money: Evidence from the e-MID Interbank Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1533-1540, October.
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  22. Luca Colombo & Gianluca Femminis, 2011. "The Welfare Implications of Costly Information Provision," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0100, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  23. Lorenzo Cappellari & Gilberto Turati, 2004. "Volunteer Labour Supply: the role of workers' motivations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(4), pages 619-643, December.
  24. Luca Colombo & Herbert Dawid & Kordian Kabus, 2012. "When do thick venture capital markets foster innovation? An evolutionary analysis," Journal of Evolutionary Economics, Springer, vol. 22(1), pages 79-108, January.
  25. Marco Brambilla & Alessandra Michelangeli & Eugenio Peluso, 2013. "Equity in the City: On Measuring Urban (Ine)quality of Life," Urban Studies, Urban Studies Journal Limited, vol. 50(16), pages 3205-3224, December.
  26. Mirko Abbritti & Andrea Boitani & Mirella Damiani, 2012. "Labour Market Imperfections, "Divine Coincidence" and Volatility of Employment and Inflation," Review of Economics and Institutions, Università di Perugia, vol. 3(1).
  27. Colombo, Luca & Femminis, Gianluca, 2008. "The social value of public information with costly information acquisition," Economics Letters, Elsevier, vol. 100(2), pages 196-199, August.
  28. Bordignon, Massimo & Nannicini, Tommaso & Tabellini, Guido, 2014. "Moderating Political Extremism: Single Round vs Runoff Elections under Plurality Rule," CEPR Discussion Papers 10323, C.E.P.R. Discussion Papers.
  29. Stefano Colombo & Luca Grilli & Cristina Rossi Lamastra, 2009. "On the determinants of the degree of openness of Open Source firms: An entry model," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0088, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  30. Luca Colombo & Gerd Weinrich, 2009. "Persistent disequilibrium dynamics and economic policy," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0086, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  31. Stefano Colombo, 2008. "Discriminatory prices, endogenous locations and the Prisoner Dilemma problem," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0079, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  32. Rossi Lorenza & Guido Ascari, 2008. "Long-run Phillips Curve and Disinfation Dynamics: Calvo vs. Rotemberg Price Setting," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0082, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  33. Bordignon, Massimo & Monticini, Andrea, 2012. "The importance of the electoral rule: Evidence from Italy," Economics Letters, Elsevier, vol. 117(1), pages 322-325.
  34. Sandro Brusco & Luca Colombo & Umberto Galmarini, 2010. "Local Governments Tax Autonomy, Lobbying, and Welfare," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0097, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  35. Angelo Baglioni & Luca Colombo, 2013. "The efficiency view of corporate boards: theory and evidence," Applied Economics, Taylor & Francis Journals, vol. 45(4), pages 497-510, February.
  36. Baglioni, Angelo & Monticini, Andrea, 2010. "The intraday interest rate under a liquidity crisis: The case of August 2007," Economics Letters, Elsevier, vol. 107(2), pages 198-200, May.
  37. Massimo Bordignon & Luca Colombo & Umberto Galmarini, 2003. "Fiscal Federalism and Endogenous Lobbies' Formation," CESifo Working Paper Series 1017, CESifo Group Munich.
  38. Andrea Terzi & Giovanni Verga, 2006. "Stock-bond correlation and the bond quality ratio: Removing the discount factor to generate a “deflated” stock index," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0067, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  39. stefano Colombo, 2010. "Bertrand and Cournot in the unidirectional Hotelling model," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0095, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  40. Andrea Boitani & Carlo Cambini, 2004. "Le gare per i servizi di trasporto locale in Europa e in Italia: molto rumore per nulla?," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2004(122).
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  42. Angelo Baglioni, 2007. "Corporate Governance as a Commitmente and Signalling Device," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0075, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  43. Luca Colombo & Herbert Dawid, 2008. "Complementary Assets, Start-Ups and Incentives to Innovate," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0080, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  44. Boitani Andrea & Cambini Carlo, 2002. "Regolazione incentivante per i servizi di trasporto locale," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 2, pages 193-226.
  45. stefano Colombo & Luca Grilli, 2010. "Another unconsidered sinister effect of indusrty-specific crises? On the possible emergence of adverse selection phenomena on the survival of entrepreneurial ventures," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0098, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  46. Mirko Abbritti & Andrea Boitani & Mirella Damiani, 2008. "Labour market imperfections, "divine coincidence" and the volatility of employment and inflation," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0078, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  47. Massimo Bordignon & Andrea Monticini, 2011. "The importance of electoral rule: Evidence from Italy," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0099, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  48. Luca Colombo & Gilberto Turati, 2008. "The Role of the Local Business Environment in Banking Consolidation," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0076, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  49. Baglioni, Angelo & Cherubini, Umberto, 2013. "Marking-to-market government guarantees to financial systems – Theory and evidence for Europe," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 990-1007.
  50. Stefano Colombo, 2011. "Pricing Policy and Partial Collusion," Journal of Industry, Competition and Trade, Springer, vol. 11(4), pages 325-349, December.
  51. Angelo Baglioni & Rony Hamaui, 2003. "The Choice Among Interbank Settlement Systems: The European Experience," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 32(1), pages 67-100, 02.
  52. Angelo Baglioni & Andrea Boitani & Massimo Liberatore & Andrea Monticini, 2010. "Is the Leverage of European Commercial Banks Pro-Cyclical?," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0093, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  53. Luca Colombo & Gilberto Turati, 2004. "La dimensione territoriale nei processi di concentrazione dell'industria bancaria italiana," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2004(84).
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