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La spesa pubblica in Italia prima e dopo la crisi

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  • A. Affuso
  • V. Bravi

Abstract

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.

Suggested Citation

  • A. Affuso & V. Bravi, 2014. "La spesa pubblica in Italia prima e dopo la crisi," Economics Department Working Papers 2014-EP01, Department of Economics, Parma University (Italy).
    • Handle: RePEc:par:dipeco:2014-ep01
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    References listed on IDEAS

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    More about this item

    Keywords

    fiscal consolidation; public expenditure; panel; economic crisis;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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