Open Economies Review

, Volume 26, Issue 4, pp 731–785 | Cite as

Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy

  • Barbara Annicchiarico
  • Fabio Di Dio
  • Francesco Felici
Research Article


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.


Fiscal Devaluation DGE Fiscal Reforms Italy 

JEL Classification

E10 C50 E60 



We are very grateful to the editor of this journal, George S. Tavlas, and to three anonymous referees for their very valuable comments and suggestions. We would also like to thank Filippo Pericoli for helpful discussions and an anonymous referee of the working paper series of the Department of the Italian Treasury for their very useful comments on an earlier version of this paper. The usual disclaimer applies. The simulation tool used in this paper, IGEM, is currently managed at Sogei S.p.A. - IT Economia - Modelli di Previsione ed Analisi Statistiche. The views expressed herein are those of the authors and not necessarily reflect those of Sogei S.p.A. and of the Italian Ministry of Economy and Finance. A Technical Appendix is available on the corresponding author’s webpage.


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Barbara Annicchiarico
    • 1
  • Fabio Di Dio
    • 2
  • Francesco Felici
    • 3
  1. 1.Department of EconomicsLaw and Institutions, University of Rome “Tor Vergata”RomaItaly
  2. 2.IT Economia - Modelli di Previsione ed Analisi Statistiche, Sogei S.p.a.RomaItaly
  3. 3.Department of the TreasuryEconomic and Financial Analysis and Planning Directorate, Italian Ministry of Economy and FinanceRomaItaly

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