Capital Inflows, Current Accounts and Investment Cycle in Italy: 1861-1913

Barbara Pistoresi () and Alberto Rinaldi

Department of Economics (DEMB) from University of Modena and Reggio Emilia, Department of Economics "Marco Biagi"

Abstract: By relying on a new dataset, this paper presents an econometric strategy to test the Fenoaltea’s thesis with regard to both the genesis of current account fluctuations and of the investment cycle. We perform a Granger causality test that shows that the persistent current account deficits in the years from unification from WW1 were generated by variations in capital inflows, as pointed by Fenoaltea, and not by the dynamics of the GDP, as claimed by the Bonelli-Cafagna model. Finally, this paper supports the Fenoaltea’s thesis that these capital inflows prompted a general investment cycle which included both construction and industrial investments

Keywords: Capital imports; current accounts; investment cycle; Italy; integration; cointegration and Granger causation analysis (search for similar items in EconPapers)
JEL-codes: F43 N1 N7 O11 (search for similar items in EconPapers)
Pages: pages 23
Date: 2014-04
New Economics Papers: this item is included in nep-acc, nep-his and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Chapter: Capital Inflows, Current Accounts and the Investment Cycle in Italy: 1861–1913 (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:mod:dembwp:0032

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