The quest for a fiscal rule: Italy, 1861–1998

Roberto Ricciuti ()

Cliometrica, Journal of Historical Economics and Econometric History, 2008, vol. 2, issue 3, pages 259-274

Abstract: The Italian fiscal history is characterised by a number of fiscal consolidations. In this study, we characterise fiscal policy in terms of non-linear deterministic processes. We find that government spending and taxes can be described as being non-linear trend stationary processes instead of unit roots. A long run equilibrium relationship—a non-linear co-trend—does exist between the two series, fulfilling the intertemporal government budget constraint. We interpret this result as evidence of a long run fiscal rule that different policy makers have adopted, putting public finance in balance.

Keywords: Intertemporal government budget constraint; Non-linear trend stationarity; Non-linear co-trending (search for similar items in EconPapers)
JEL-codes: E62 H62 N10 (search for similar items in EconPapers)
Date: 2008
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Working Paper: The quest for a fiscal rule: Italy, 1861-1998 (2007)
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