Il pensiero economico

Il pensiero economico

According to the latest studies, measures of fiscal consolidation have had a negative effect on the economy thereby dispelling the myth of expansionary austerity based on the idea of a negative fiscal multiplier able to promote growth. In line with recent empirical works on the multiplier of fiscal policy, the following analysis shows that variations in autonomous demand (public spending, exports and autonomous consumption) have a strong multiplier effect on the GDP.

Numerous commentators maintain that the 2015 Italian budget is “expansionary”. This article however shows that it does not have a Keynesian character and presents uncertain results. The government’s strategy is to support families’ available income by increasing public funding and cutting fiscal pressure. The analysis also shows that the success of this budget is threatened because it depends strongly on the families’ willingness to spend the greater income made available.

Many economists believe that the European economic crisis is mainly due to a systematic excess of public spending that has made public debt increase dramatically. The statistical analyses provided in this paper however show that the level of public debt prior to the outbreak of the crisis had no predictive function for the subsequent rise.