Convegno scientifico Roma 12 ottobre 2016
Elementi storico economici della statistica nella società italiana nel lungo periodo
We examine the historical dynamics of government debt in Italy, from 1861 to 2009. Controlling debt dynamics for fiscal feedback policies of the Barro-Bohn style the debt-GDP ratio is found to be mean-reverting. Mean reversion in the debt-GDP ratio is due not only to a nominal growth dividend, but also to a positive response of primary surpluses to variations in outstanding debt.
There is indeed significant evidence that, over the history of Italy, fiscal policy makers have reacted to the accumulation of debt, taking corrective measures to rule out potential long-term sustainability problems.
Una particola branca della teoria economica studia l’interessante tema di come il policy-maker dovrebbe agire. È questa la cosiddetta teoria normativa della politica economica. Le questioni sollevate dai teorici normativi sono generalmente relative a pochi temi principali. Es.: Intervenire nell’economia o limitare i propri interventi lasciando il mercato libero di agire?
Una seconda branca della teoria economica studia in che modo i policy-maker agiscono nella realtà. È questa la cosiddetta teoria positiva della politica economica. Essa tenta di individuare le ragioni per le quali i policy-maker agiscono in un determinato modo. Es.: vincoli istituzionali, convinzioni di natura teorica ecc…
Striking a balance: optimal tax policy with labor market dualityGRAPE
A DSGE model that explains cross country variation in labour market duality using the share of social security tax in the total labour tax wedge. Deterministic simulations show that a 'tax policy' reform that increases firms' share of the social security tax burden has a welfare enhancing effect across most EU countries.
The heterogeneous effects of government spending, by Axelle Ferriere (Europea...ADEMU_Project
How expansionary is government spending? Evidence shows if
output increases, consumption doesn't decrease. Axelle Ferriere revisits this question, taking into account tax distribution.
Una particola branca della teoria economica studia l’interessante tema di come il policy-maker dovrebbe agire. È questa la cosiddetta teoria normativa della politica economica. Le questioni sollevate dai teorici normativi sono generalmente relative a pochi temi principali. Es.: Intervenire nell’economia o limitare i propri interventi lasciando il mercato libero di agire?
Una seconda branca della teoria economica studia in che modo i policy-maker agiscono nella realtà. È questa la cosiddetta teoria positiva della politica economica. Essa tenta di individuare le ragioni per le quali i policy-maker agiscono in un determinato modo. Es.: vincoli istituzionali, convinzioni di natura teorica ecc…
Striking a balance: optimal tax policy with labor market dualityGRAPE
A DSGE model that explains cross country variation in labour market duality using the share of social security tax in the total labour tax wedge. Deterministic simulations show that a 'tax policy' reform that increases firms' share of the social security tax burden has a welfare enhancing effect across most EU countries.
The heterogeneous effects of government spending, by Axelle Ferriere (Europea...ADEMU_Project
How expansionary is government spending? Evidence shows if
output increases, consumption doesn't decrease. Axelle Ferriere revisits this question, taking into account tax distribution.
Striking a balance: optimal tax policy with labor market dualityGRAPE
How does the cross country variation in employer social contributions as a share of the total labor tax wedge explain informal employment? By up to 40%. We show here that a 50:50 split of the labor income tax burden between employers and employees like in France, optimizes welfare and fiscal revenues.
Multi-layered comprehensive climate risk management (CRM) in Austria – connec...OECD Governance
Investing in infrastructure: Costs, benefits and effectiveness of disaster risk reduction measures.
Presentation made by:
- Thomas Schinko, International Institute for
Applied Systems Analysis (IIASA)
- Markus Leitner, Environment Agency Austria (EAA)
Putting well being metrics into policy action, Susan BattlesStatsCommunications
Putting Well-being Metrics into Policy Action, 3-4 October 2019, Paris, France. More information at: http://www.oecd.org/statistics/putting-well-being-metrics-into-policy-action.htm
Rebalancing the €A: Insights from #BdFeco research, Marc-O. Strauss-KahnSoledad Zignago
Marc-O. Strauss-Kahn's presentation "Rebalancing the €A: Insights from #BdFeco research", 13th CompNet Annual Conference, Brussels, June 29 2017. Other slides available at https://ec.europa.eu/info/sites/info/files/conference_program_-_version_6_july_2017.pdf
As the global financial crisis entered its most dramatic phase, in the second half of 2008, the International Monetary Fund (IMF), many governments and several distinguished scholars advocated expansionary fiscal olicy as the second most effective tool (after monetary stimulus) to fight deep recession and deflation. Now, more than a year later, the previous excitement surrounding the supposed power of fiscal stimulus largely disappeared and instead has been replaced by ising concerns over the sustainability of public finances in many countries. Unfortunately, the previous enthusiasts of the active counter‐cyclical fiscal policy have not always realized the causality between the two.
Authored by: Marek Dąbrowski
Published in 2009
Does High Public Debt Consistently Stifle Economic Growth? A Critique a Reinh...Marco Garoffolo
Proprio in questi giorni abbiamo avuto una prova, decisiva, dell'utilità della non-cooperazione con la ragion di Stato. Ne ha riferito Paul Krugman, in un articolo che dichiara defunta, almeno nelle accademie, l'Austerità (Repubblica, 27 aprile). È un dogma cui l'Europa è appesa da anni: se non cresciamo economicamente, è solo perché gli Stati sono troppo indebitati. A sfatare l'assioma: tre economisti non ortodossi dell'università di Massachusetts-Amherst (i professori Michael Ash e Robert Pollin, lo studente di dottorato Thomas Herndon) che hanno scoperto errori di computer (l'errore Excel) commessi nel 2010 dai due economisti di Harvard, Kenneth Rogoff e Carmen Reinhart. Il dogma ("i Paesi che si indebitano oltre il 90 per cento del Pil non possono crescere") è in pezzi. http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf
Running head THE EFFECTS OF FOREIGN DIRECT INVESTMENT1PAGE .docxtodd521
Running head: THE EFFECTS OF FOREIGN DIRECT INVESTMENT
1
PAGE
4
THE EFFECTS OF FOREIGN DIRECT INVESTMENT
The Effects of Foreign Direct Investment and Foreign Aid on Gross Domestic Product in Developing Countries: A Case for the Democratic Republic of the Congo
25/25
Author Note
Mathew A. Schulz, Department of Economics, Salem State University.
Mathew A. Schulz will be attending Boston University for his master’s degree in city planning, focusing on development and public policy. Correspondence concerning this article should be addressed to [email protected]
Abstract
Prompting this analysis was the International Monetary Fund’s 2010 report of gross domestic product purchase power parity per capita, where the Democratic Republic of the Congo (D.R. Congo) ranked last, at a meager $328 (U.S.) annually. With the recent debates concerning whether or not sub-Saharan African countries have benefited from capital inflows, this paper explores the effects of foreign direct investment and foreign aid on the D.R. Congo’s gross domestic product. In the D.R. Congo, empirical evidence suggests that a slight positive correlation exists between capital inflows and gross domestic product. However, due to the volatility of foreign direct investment and aid, comprehensive policies promoting economic and political stability should be examined.
The Effects of Foreign Direct Investment and Foreign Aid On Gross Domestic Product in Developing Countries: A Case for the Democratic Republic of the Congo
The history of the effectiveness of capital inflows to Africa has raised much debate as to whether or not any contributions have increased development. The literature overviews of the area, particularly in regards to sub-Saharan Africa (SSA), have identified many determinant variables of growth. Highlighting several forms such as foreign direct investment (FDI), official development assistance (ODA), domestic savings, improved infrastructure, debt relief, and reinvestment, among others, many economists conclude that the first two are most important for increasing economic growth. It is FDI and foreign aid (AID), both external sources, which benefit economic expansion in less developed countries (LDCs). This phenomenon, despite not always being true, has gained recent momentum. According to Collier and Gunning (1999) their study for the period between 1960-1989 found one explanatory variable, investment to GDP ratio, statistically significant in explaining growth in Africa. They concluded that African countries with higher investment to GDP ratios had higher economic growth rates. Another study, Loots (2003) found similar results. The study, covering the period from 1995-2000, found that per-capita growth during the period was directly related to external capital inflows. In particular, Loots (2003) noted that FDI and ODA flows were important in understanding the growth of African countries in the mid to late 90s.
The objectiv.
In what follows we estimate a number of macroeconomic scenarios starting from the most pessimistic one where the economy feels the full effect of the austerity measures without any mitigating actions. In that scenario the economy will contract by -2.8%. We believe that the prospect of such an adverse outcome should motivate all policy makers to spring into action.
We also estimate a scenario under which Greek households, in an attempt to cushion the impact of austerity on their living standards, reduce their savings even further, limiting somewhat the size of economic contraction to -2.5%.
Yet, the only factor with true recession - mitigating potency is the clearance of Government Arrears which if distributed timely could help limit the level of GDP recession to -1.1%.
El próximo viernes 11/03 a las 10 h. se expondrá públicamente dicha presentación en la Facultad de Ciencias Económicas y Empresariales de la Universidad de Cádiz (UCA). Y a las 12 h., tendrá lugar en el nuevo salón de Actos de la Escuela Superior de Ingeniería (Puerto Real).
La conferencia se realizará en inglés y correrá a cargo del Prof. Dr. Steffen Minter del Instituto de Teoría Económica y Finanzas de la Universidad Albert-Ludwig Freiburg – Deutschland (Friburgo - Alemania). La ponencia versará sobre la Crisis en la Eurozona y las Políticas fallidas (Eurozone crisis and policy failure).
Resumen: Analizar la crisis sufrida en Europa y poner de manifiesto la falta de políticas acertadas para ayudar a salir de la crisis de una manera más eficaz y menos traumática.
Striking a balance: optimal tax policy with labor market dualityGRAPE
How does the cross country variation in employer social contributions as a share of the total labor tax wedge explain informal employment? By up to 40%. We show here that a 50:50 split of the labor income tax burden between employers and employees like in France, optimizes welfare and fiscal revenues.
Multi-layered comprehensive climate risk management (CRM) in Austria – connec...OECD Governance
Investing in infrastructure: Costs, benefits and effectiveness of disaster risk reduction measures.
Presentation made by:
- Thomas Schinko, International Institute for
Applied Systems Analysis (IIASA)
- Markus Leitner, Environment Agency Austria (EAA)
Putting well being metrics into policy action, Susan BattlesStatsCommunications
Putting Well-being Metrics into Policy Action, 3-4 October 2019, Paris, France. More information at: http://www.oecd.org/statistics/putting-well-being-metrics-into-policy-action.htm
Rebalancing the €A: Insights from #BdFeco research, Marc-O. Strauss-KahnSoledad Zignago
Marc-O. Strauss-Kahn's presentation "Rebalancing the €A: Insights from #BdFeco research", 13th CompNet Annual Conference, Brussels, June 29 2017. Other slides available at https://ec.europa.eu/info/sites/info/files/conference_program_-_version_6_july_2017.pdf
As the global financial crisis entered its most dramatic phase, in the second half of 2008, the International Monetary Fund (IMF), many governments and several distinguished scholars advocated expansionary fiscal olicy as the second most effective tool (after monetary stimulus) to fight deep recession and deflation. Now, more than a year later, the previous excitement surrounding the supposed power of fiscal stimulus largely disappeared and instead has been replaced by ising concerns over the sustainability of public finances in many countries. Unfortunately, the previous enthusiasts of the active counter‐cyclical fiscal policy have not always realized the causality between the two.
Authored by: Marek Dąbrowski
Published in 2009
Does High Public Debt Consistently Stifle Economic Growth? A Critique a Reinh...Marco Garoffolo
Proprio in questi giorni abbiamo avuto una prova, decisiva, dell'utilità della non-cooperazione con la ragion di Stato. Ne ha riferito Paul Krugman, in un articolo che dichiara defunta, almeno nelle accademie, l'Austerità (Repubblica, 27 aprile). È un dogma cui l'Europa è appesa da anni: se non cresciamo economicamente, è solo perché gli Stati sono troppo indebitati. A sfatare l'assioma: tre economisti non ortodossi dell'università di Massachusetts-Amherst (i professori Michael Ash e Robert Pollin, lo studente di dottorato Thomas Herndon) che hanno scoperto errori di computer (l'errore Excel) commessi nel 2010 dai due economisti di Harvard, Kenneth Rogoff e Carmen Reinhart. Il dogma ("i Paesi che si indebitano oltre il 90 per cento del Pil non possono crescere") è in pezzi. http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf
Running head THE EFFECTS OF FOREIGN DIRECT INVESTMENT1PAGE .docxtodd521
Running head: THE EFFECTS OF FOREIGN DIRECT INVESTMENT
1
PAGE
4
THE EFFECTS OF FOREIGN DIRECT INVESTMENT
The Effects of Foreign Direct Investment and Foreign Aid on Gross Domestic Product in Developing Countries: A Case for the Democratic Republic of the Congo
25/25
Author Note
Mathew A. Schulz, Department of Economics, Salem State University.
Mathew A. Schulz will be attending Boston University for his master’s degree in city planning, focusing on development and public policy. Correspondence concerning this article should be addressed to [email protected]
Abstract
Prompting this analysis was the International Monetary Fund’s 2010 report of gross domestic product purchase power parity per capita, where the Democratic Republic of the Congo (D.R. Congo) ranked last, at a meager $328 (U.S.) annually. With the recent debates concerning whether or not sub-Saharan African countries have benefited from capital inflows, this paper explores the effects of foreign direct investment and foreign aid on the D.R. Congo’s gross domestic product. In the D.R. Congo, empirical evidence suggests that a slight positive correlation exists between capital inflows and gross domestic product. However, due to the volatility of foreign direct investment and aid, comprehensive policies promoting economic and political stability should be examined.
The Effects of Foreign Direct Investment and Foreign Aid On Gross Domestic Product in Developing Countries: A Case for the Democratic Republic of the Congo
The history of the effectiveness of capital inflows to Africa has raised much debate as to whether or not any contributions have increased development. The literature overviews of the area, particularly in regards to sub-Saharan Africa (SSA), have identified many determinant variables of growth. Highlighting several forms such as foreign direct investment (FDI), official development assistance (ODA), domestic savings, improved infrastructure, debt relief, and reinvestment, among others, many economists conclude that the first two are most important for increasing economic growth. It is FDI and foreign aid (AID), both external sources, which benefit economic expansion in less developed countries (LDCs). This phenomenon, despite not always being true, has gained recent momentum. According to Collier and Gunning (1999) their study for the period between 1960-1989 found one explanatory variable, investment to GDP ratio, statistically significant in explaining growth in Africa. They concluded that African countries with higher investment to GDP ratios had higher economic growth rates. Another study, Loots (2003) found similar results. The study, covering the period from 1995-2000, found that per-capita growth during the period was directly related to external capital inflows. In particular, Loots (2003) noted that FDI and ODA flows were important in understanding the growth of African countries in the mid to late 90s.
The objectiv.
In what follows we estimate a number of macroeconomic scenarios starting from the most pessimistic one where the economy feels the full effect of the austerity measures without any mitigating actions. In that scenario the economy will contract by -2.8%. We believe that the prospect of such an adverse outcome should motivate all policy makers to spring into action.
We also estimate a scenario under which Greek households, in an attempt to cushion the impact of austerity on their living standards, reduce their savings even further, limiting somewhat the size of economic contraction to -2.5%.
Yet, the only factor with true recession - mitigating potency is the clearance of Government Arrears which if distributed timely could help limit the level of GDP recession to -1.1%.
El próximo viernes 11/03 a las 10 h. se expondrá públicamente dicha presentación en la Facultad de Ciencias Económicas y Empresariales de la Universidad de Cádiz (UCA). Y a las 12 h., tendrá lugar en el nuevo salón de Actos de la Escuela Superior de Ingeniería (Puerto Real).
La conferencia se realizará en inglés y correrá a cargo del Prof. Dr. Steffen Minter del Instituto de Teoría Económica y Finanzas de la Universidad Albert-Ludwig Freiburg – Deutschland (Friburgo - Alemania). La ponencia versará sobre la Crisis en la Eurozona y las Políticas fallidas (Eurozone crisis and policy failure).
Resumen: Analizar la crisis sufrida en Europa y poner de manifiesto la falta de políticas acertadas para ayudar a salir de la crisis de una manera más eficaz y menos traumática.
S. Corradini, L. Martinez, 30 Novembre - 1 Dicembre 2021 -
Webinar: L'inclusione lavorativa: il panorama nazionale e l'esperienza dell'Istat
Titolo: La condizione occupazionale delle persone con disabilità
L. Lavecchia, 30 Novembre - 1 Dicembre 2021 -
Webinar: Il quadro informativo per il Green Deal: sviluppi e domanda informativa per le questioni energetiche
Titolo: La misura della povertà energetica in Italia
V. Buratta, 30 Novembre - 1 Dicembre 2021 -
Webinar: La strategia dei dati: l’iniziativa europea e la risposta nazionale
Titolo: Il ruolo dell'Istat nella Strategia Nazionale ed Europea dei Dati
E. Fornero, 30 Novembre - 1 Dicembre 2021 -
Webinar: Gender statistics by default: il cambiamento di paradigma nelle statistiche e oltre
Titolo: Illusioni, luoghi comuni e verità nella lotta alle disparità di genere
A. Perrazzelli, 30 Novembre - 1 Dicembre 2021 -
Webinar: Gender statistics by default: il cambiamento di paradigma nelle statistiche e oltre
Titolo: Qualità di genere per sostenere la crescita
A. Tinto, 30 Novembre - 1 Dicembre 2021 -
Webinar: Gli effetti della pandemia sulla soddisfazione per la vita e il benessere: analisi e prospettive
Titolo: L'impatto della pandemia sulla componente soggettiva del Benessere Equo e Sostenibile
L. Becchetti, 30 Novembre - 1 Dicembre 2021 -
Webinar: Gli effetti della pandemia sulla soddisfazione per la vita e il benessere: analisi e prospettive
Titolo: La pandemia attraverso gli indicatori soggettivi a livello internazionale: un paradosso?
G. Onder, 30 Novembre - 1 Dicembre 2021 -
Webinar: La lezione della crisi per le statistiche demografiche e sociali
Titolo: Il sistema di sorveglianza dei decessi dell'ISS e le nuove prospettive
C. Romano, 30 Novembre - 1 Dicembre 2021 -
Webinar: La lezione della crisi per le statistiche demografiche e sociali
Titolo: Nuovi strumenti e indagini per un'informazione pertinente in fase di emergenza
S. Prati, M. Battaglini, G. Corsetti, 30 Novembre - 1 Dicembre 2021 -
Webinar: La lezione della crisi per le statistiche demografiche e sociali
Titolo: La sfida per la demografia: tempestività e qualità dell'informazione
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptxEduSkills OECD
Andreas Schleicher presents at the OECD webinar ‘Digital devices in schools: detrimental distraction or secret to success?’ on 27 May 2024. The presentation was based on findings from PISA 2022 results and the webinar helped launch the PISA in Focus ‘Managing screen time: How to protect and equip students against distraction’ https://www.oecd-ilibrary.org/education/managing-screen-time_7c225af4-en and the OECD Education Policy Perspective ‘Students, digital devices and success’ can be found here - https://oe.cd/il/5yV
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
2024.06.01 Introducing a competency framework for languag learning materials ...
Michele Postigliola, Dinamiche della politica fiscale e del debito pubblico in Italia: 1861-2009
1. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 1 / 25
2. Dinamiche della politica fiscale e del debito pubblico in
Italia: 1861-2009
Michele Postigliola
“Sapienza” Universit`a di Roma
Dipartimento di
METODI E MODELLI PER L’ECONOMIA, IL TERRITORIO E LA
FINANZA
Sapienza Universit`a di Roma
12 Ottobre 2016
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 1 / 25
3. Italy’s nominal public debt is the third largest in the world after the
United States and Japan. Italy’s public debt-GDP ratio is the
eleventh largest in the world after Liberia, Japan, St. Kitts and Nevis,
Guinea-Bissau, Lebanon, the Democratic Republic of Congo, Jamaica,
Seychelles, Grenada, and Antigua and Barbuda (IMF 2010)
Debt and deficits in Italy have sharply increased following the Great
Recession started in 2007.
Did Italy’s fiscal policy makers react to debt accumulation in the
past? Is Italy’s public debt on a sustainable path? In this paper we
examine the historical dynamics of government debt in
post-unification Italy, from 1861 to 2009.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 2 / 25
4. Literature
Bohn (1998, 2007) shows that, deriving sustainability tests from the
government’s intertemporal budget constraint, impose very weak
econometric restrictions for testing the sustainability hypothesis.
Chung, Davig and Leeper (2007), emphasized that the debt-GDP
ratio can grow without limit and, at the same time, be perceived by
economic agents as sustainable.
Barro (1979,1986) shows the tax-smooting theory of primary-surplus
policies
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 3 / 25
5. Description of the data
The debt series is obtained: the end of period of central government
nominal debt (Fratianni e Spinelli (2001) from 1861-1998; Bank of
Italy, Relazione Annuale 1999-2009)
Nominal GDP: Obstfeld and Jones (2001) from 1861 to 1889; Rossi,
Sorgato, Toniolo (1993) from 1890-1970; Bank of Italy, Relazione
Annuale, from 1971-2009.
Primary surplus series: obtained by dividing a difference of central
government nominal revenues and central government nominal outlays
(Repaci (1962) from 1862 to 1952;Bank of Italy from 1953 to 2009.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 4 / 25
6. Description of the data
The real government spending series: obtained by dividing central
government nominal outlays by the GDP deflator (Fratianni e Spinelli,
2001) from 1861 to 1998; ISTAT, Bollettino Statistico, from 1999 to
2009.
The real GDP series: obtained by dividing central government
nominal outlays by the GDP deflator
The nominal interest: obtained dividing it interest payment at t over
the average of stock of nominal debt at the end of period t and
period t − 1 (Bohn 2008)
The inflation rate series: is the rate of variation of the GDP deflator.
Growth rate series: is the rate of variation of real GDP.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 5 / 25
7. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 6 / 25
8. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 7 / 25
9. Unit Root Tests for Italy’s debt-GDP ratio
The ADF and PP tests examine the null HP of unit root against the
alternative HP of stationarity, KPSS test is the opposite: the results
are puzzling.
ADF and PP tests suggests absence of corrective measures by fiscal
policy maker with potential sustainability problem; KPSS suggest no
potential sustainability problems
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 8 / 25
10. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 9 / 25
11. Fiscal Feedback Policy and Debt Dynamics
Consider first the government’s budget identity:Bt = Bt−1 + Gt − Tt,
Define the government’s primary surplus as: St = Tt − (Gt − itBt−1)
Then divide both sides of the budget identity by the nominal GDP Yt
to get the law of motion of the debt-GDP ratio,
bt = (1 + r) bt−1 − st, (1)
where bt = Bt /Yt, st = St /Yt, and r = (1 + it ) / (1 + nt ) − 1 is
the nominal interest rate deflated by the nominal GDP growth rate,
nt = (Yt − Yt−1) /Yt−1
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 10 / 25
12. Fiscal Feedback Policy and Debt Dynamics
Consider a policy function of the form:
st = ρbt−1 + α zt + εt, (2)
where ρ > 0 captures the degree of reactiveness of the primary surplus
to debt, zt is a vector of additional determinants of the primary
surplus, α is a vector of parameters, and εt is a mean-zero error term.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 11 / 25
13. Fiscal Feedback Policy and Debt Dynamics
∆bt = (r − ρ) bt−1 + β zt + vt, (3)
where β = −α and vt = −εt. Assume that zt is stationary. Then the
debt-GDP ratio is mean-reverting if r − ρ < 0. According to (3),
standard unit root tests can easily fail to detect mean-reversion in the
debt-GDP ratio for two reasons.
First, if r − ρ is strictly below zero - but not much below zero - unit
root tests can easily lead to accept the unit root null hypothesis.
Second, unit root tests are misspecified since they omit zt, that is,
the non-debt determinants of the primary surplus
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 12 / 25
14. Fiscal Feedback Policy and Debt Dynamics
Standard tax smooting theory (Barro,1979,1986) implies an empirical
specification for the change in debt-GDP ratio:
∆bt = γbt−1 + β0 + β1 ˜gt + β2 ˜yt + vt, (4)
where ˜gt is a measure of temporary government spending, ˜yt is a
measure of temporary output, and (γ, β0, β1, β2) are regression
coefficients (Table.2)
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 13 / 25
15. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 14 / 25
16. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 15 / 25
17. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 16 / 25
18. Fiscal Feedback Policy and Debt Dynamics
Another empirical specification for the change in debt-GDP ratio
based on the closed-form solution of Barro (1986) tax-smoothing:
∆bt = γbt−1 + β0 + β1GVARt + β2YVARt + vt. (5)
The two measures are referred as GVARt for government spending
and YVARt for output, and are given by GVARt = gt − gT
t /yt and
YVARt = gT
t /yt yT
t − yt /yT
t , where gt is real government
spending, yt is real output, and gT
t and yT
t are corresponding trend
values (Table.3)
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 17 / 25
19. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 18 / 25
20. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 19 / 25
21. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 20 / 25
22. Mean reversion is detected?
Following Bohn (2008), we calculate the nominal interest rate on
debt it as the ratio of interest payments for period t over the average
of the stock of nominal debt at the end of period t and at the end of
period t − 1.1 For the whole sample, the average nominal interest rate
on debt is 4.9 percent; the average nominal GDP growth rate is 10.2
percent, more than 3/4 due to inflation and less than 1/4 due to real
GDP growth; thus, r = (1 + 0.049) / (1 + 0.102) − 1 ≈ −0.048 < 0.
This implies that the “nominal growth dividend” has exceeded the
interest cost on public debt, preventing per se the debt-GDP ratio
from embarking on unstable paths.
1Computing the nominal interest rate in this way enables us to take into
account the fact that government debt is composed of a portfolio of securities
with different interest rates.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 21 / 25
23. Mean reversion is detected?
Table 4 shows estimates of the policy function
st = ρbt−1 + α0 + α1 ˜gt + α2 ˜yt + εt, (6)
where (ρ, α0, α1, α2) are regression coefficients. The ρ coefficient on
the outstanding debt-GDP ratio is positive and highly significant in all
Regressions.
Table.5 shows a significantly positive value of ρ is also detected
substituting measures ˜gt and ˜yt with GVARt and YVARt.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 22 / 25
24. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 23 / 25
25. M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 24 / 25
26. Conclusions
We have found significant evidence of mean-reversion in the
debt-GDP ratio
We have shown how mean reversion reflects nominal growth dividend
and a positive response of primary surpluses to increases in a debt
We found long term sustainability in Italy’s fiscal policy making.
M. Postigliola (Sapienza Universit`a di Roma) Politica Fiscale e Debito Pubblico 12 Ottobre 2016 25 / 25