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Fiscal Consolidation Policies in the Context of Italy's Two Recessions
Author(s) -
Figari Francesco,
Fiorio Carlo V.
Publication year - 2015
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.2015.12074
Subject(s) - recession , economics , sovereign debt , debt , consolidation (business) , financial crisis , economic policy , fiscal policy , context (archaeology) , position (finance) , monetary economics , sovereignty , macroeconomics , finance , political science , paleontology , politics , biology , law
Italy experienced a double‐dip Great Recession: after the start of the global financial crisis, Italy had a second serious recession in 2011 as a result of the sovereign debt crisis. The reaction of Italian governments was minimal at the beginning but more serious action has been taken to address Italy's fiscal problems since the start of the sovereign debt crisis in 2011. The policies adopted have helped to move the public finances to a more sustainable position, but household real incomes decreased by 13 per cent, with this reduction being quite unevenly felt across the household income distribution. The medium‐term outlook is still uncertain: a great deal depends on the capacity of the Italian economy to reduce the level of public debt and to return to sustained economic growth, which has been very weak for more than a decade.