Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy
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- Annicchiarico, B., Dio, F.D. & Felici, F. Open Econ Rev (2015) 26: 731. doi:10.1007/s11079-014-9335-7
We study the potential impact of fiscal devaluation poon the Italian economy using IGEM, a dynamic general equilibrium model for the Italian economy developed at the Italian Department of the Treasury. The simulations show that fiscal devaluation policies are likely to produce short-run slight improvements on the external position of the economy, while the output gains seem to persist in the long run. Non-negligible distributional effects across households are also observed, since taxation on consumption tends to be regressive.