Public expenditure in time of crisis: are Italian policymakers choosing the right mix?

Francesco Prota and Maria Jennifer Grisorio
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Maria Jennifer Grisorio: Agenzia Regionale per la Tecnologia e l’Innovazione, ARTI

Economia Politica: Journal of Analytical and Institutional Economics, 2018, vol. 35, issue 2, No 4, 337-365

Abstract: Abstract In the ‘austerity debate’ a crucial issue is the composition of fiscal adjustment. This article provides empirical evidence on the relationship between economic crisis episodes and composition of public expenditure by examining the impact of economic crises on the share of different types of public spending in total public expenditure in the Italian regions. Our results suggest that fiscal consolidation strategies have not had growth-friendly expenditure composition. The crisis aggravated budgetary trade-offs by reducing the share of discretionary spending such as public investments.

Keywords: Economic crisis; Composition of government expenditure; Panel data (search for similar items in EconPapers)
JEL-codes: C23 E62 R50 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (8)

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Working Paper: Public expenditure in time of crisis: are Italian policymakers choosing the right mix? (2016)
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DOI: 10.1007/s40888-018-0124-4

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