Italy, the fiscal dominance model, and the gold standard age

Giuseppe Tattara and Mario Volpe

MPRA Paper from University Library of Munich, Germany

Abstract: The paper links money supply to the state budget deficit in the Italian historical context. The process of monetization of government deficit is analysed and is related both to the fixity of the exchange rate and free capital mobility typical of the 1860-1913 period. The empirical evidence supporting the view of Italy “shadowing” gold is discussed and the effect of government financing on money supply is tested. The conlusion discusses the implications of the model and of the empirical evidence for the interpretation of the Gold Standard.

Keywords: Monetary theory; Gold Standard; Fiscal theory; Economic History of Italy (search for similar items in EconPapers)
JEL-codes: E32 E62 G32 H30 N13 (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (7)

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