Suchergebnisse

Why do some States default on their debt more often than others? We argue that sovereign default is the outcome of a political struggle among different groups of citizens. It is less likely to happen if domestic debt-holders are politically strong and/or the costs of the financial turmoil typically triggered by a sovereign bankruptcy are large. We show that these conditions are in turn more likely to be present if a country has a strong middle class and/or a sufficiently independent central bank. [Copyright Elsevier B.V.]

This paper shows that compromise between different ideological motivations within multiparty governments may result in a bias toward running budget deficits even if all parties in the coalition prefer balanced budgets. The deficit bias increases with the degree of "polarization" of the ideological motivations & generally decreases with the degree of concentration of power within the government. Although the analysis is conducted assuming a proportional representation electoral system, the results will also apply to majoritarian systems if the winning party comprises ideologically different constituencies. The relationship between budget deficits & multiparty governments is investigated using data from a sample of eight European Union countries for the period 1971-1990. Analysis on pooled data is partly in line with the theory. Time series within country analysis is less favorable: we find clear support of the theory only in the case of Italy. 3 Tables, 6 Figures, 18 References. Adapted from the source document.

This paper studies the effects of fiscal policy on private GDP, inflation and the long-term interest rate in Italy using a structural Vector Autoregression model. To this end, a database of quarterly cash data for selected fiscal variables for the period 1982:1-2004:4 is constructed, largely relying on the information contained in the Italian Treasury Quarterly Reports. The main results of the study can be summarized as follows. A shock to government purchases of goods and services has a sizeable and robust effect on economic activity: an exogenous 1% (in terms of private GDP) shock increases private real GDP by 0.6% after 3 quarters. The response goes to zero after two years, reflecting with a lag the low persistence of the shock. The effects on employment, private consumption and investment are also positive. The response of inflation is positive but small and short-lived. In contrast, public wages, which in many studies are lumped together with purchases, have no significant effect on output, while the effects on employment turn negative after two quarters. Shocks to net revenue have negligible effects on all the variables. [Copyright 2007 Elsevier B.V.]