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La spesa pubblica in Italia prima e dopo la crisi

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In response to the recession, many European Countries, Italy included, are undertaking large spending cuts and tax hikes. This paper investigates whether the changes in the composition of public spending would hurt the long-run economic growth. If the composition of spending is strongly tilted towards nondiscretionary items, the resulting expenditure policies are adversely constrained. Flexibility is needed in reducing inefficient expenditure rather than restraining flexible components of the budget, such as public investment in research and development, and education. In this paper, the initial investigation analyzed the composition of Italian public spending, and then assessed the variation effects of the components of public expenditure on the European countries GDP growth using Panel Data Analysis. The results suggested that expenditure on social protection, pension and general services negatively affected the GDP growth rate, while education and public order expenditure had positive effects.

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File URL: http://swrwebeco.econ.unipr.it/RePEc/pdf/I_2014-01.pdf
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Paper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2014-EP01.

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Length: 22 pages
Date of creation: 2014
Date of revision:
Handle: RePEc:par:dipeco:2014-ep01
Contact details of provider: Postal: Via J.F. Kennedy 6, 43100 PARMA (Italy)
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Web page: http://economia.unipr.it/de
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  1. Enisse Kharroubi & Philippe Aghion, 2008. "Cyclical Macro Policy and Industry Growth: The effect of counter-cyclical fiscal policy," 2008 Meeting Papers 837, Society for Economic Dynamics.
  2. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
  3. Daniel Leigh & Andrea Pescatori & Jaime Guajardo, 2011. "Expansionary Austerity New International Evidence," IMF Working Papers 11/158, International Monetary Fund.
  4. Laura Jaramillo & Carlo Cottarelli, 2012. "Walking Hand in Hand; Fiscal Policy and Growth in Advanced Economies," IMF Working Papers 12/137, International Monetary Fund.
  5. Francesco Giavazzi & Marco Pagano, 1995. "Non-Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience," NBER Working Papers 5332, National Bureau of Economic Research, Inc.
  6. Emanuele Baldacci & Sanjeev Gupta & Carlos Mulas-Granados, 2012. "Reassessing the fiscal mix for successful debt reduction," Economic Policy, CEPR;CES;MSH, vol. 27(71), pages 365-406, 07.
  7. Olivier J. Blanchard & Daniel Leigh, 2013. "Growth Forecast Errors and Fiscal Multipliers," NBER Working Papers 18779, National Bureau of Economic Research, Inc.
  8. Christina D. Romer & David H. Romer, 2010. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review, American Economic Association, vol. 100(3), pages 763-801, June.
  9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, June.
  10. John H. Cochrane, 2010. "Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic," NBER Working Papers 16087, National Bureau of Economic Research, Inc.
  11. Dotsey, Michael, 1994. "Some unpleasant supply side arithmetic," Journal of Monetary Economics, Elsevier, vol. 33(3), pages 507-524, June.
  12. Roberto Perotti, 2011. "The "Austerity myth": Gain Without Pain?," BIS Working Papers 362, Bank for International Settlements.
  13. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 75-122 National Bureau of Economic Research, Inc.
  14. Alberto Alesina & Roberto Perotti, 1996. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," NBER Working Papers 5730, National Bureau of Economic Research, Inc.
  15. Roberto Perotti, 2011. "The "Austerity Myth": Gain without Pain?," Working Papers 430, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  16. Alberto Alesina & Silvia Ardagna, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 35-68 National Bureau of Economic Research, Inc.
  17. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  18. Perotti, Roberto, 2011. "The "Austerity Myth": Gain without Pain?," CEPR Discussion Papers 8658, C.E.P.R. Discussion Papers.
  19. Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
  20. Roberto Perotti, 2011. "The "Austerity Myth": Gain Without Pain?," NBER Working Papers 17571, National Bureau of Economic Research, Inc.
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