This contribution analyzes the evolution of public debt and inflation inItaly between the late 1960s and the present. In particular, five distinctphases are identified. The first phase (1969-1979), in which the evo-lutionof public debt and inflation was strongly influenced by internationalshocks and trade union strug-gles. This period was characterizedby an increase in public debt and inflation. The second (1979-1993)was characterized by a lack of consistency between fiscal and monetarypolicies. During these years there was a conflict between the governmentand the Bank of Italy, as the Italian government focused onexpanding the public budget and the central bank on reducing inflation.This had a strong impact on the stability of the public accounts.The third phase (1994-2007), marked by the beginning of the processof monetary and fi-scal convergence towards the Maastricht parameters.The fourth (2008-2019), which began with two finan-cial crisesand ended with deep stagnation and low inflation. During this phaseItaly suffered the negative effects of the austerity policies that affectedthe PIIGS countries. Finally, the phase associated with the pandemicand the Russian-Ukrainian conflict (2020-2023), characterized by high public debt and rising in-flation, for which we still do not have a clear picture.
Public Debt and Inflation in Italy’s Political Economy: Then and Now / Gobbi, Lucio; Lucarelli, Stefano. - 35:(2024), pp. 109-133.
Public Debt and Inflation in Italy’s Political Economy: Then and Now
Gobbi, LucioPrimo
;
2024-01-01
Abstract
This contribution analyzes the evolution of public debt and inflation inItaly between the late 1960s and the present. In particular, five distinctphases are identified. The first phase (1969-1979), in which the evo-lutionof public debt and inflation was strongly influenced by internationalshocks and trade union strug-gles. This period was characterizedby an increase in public debt and inflation. The second (1979-1993)was characterized by a lack of consistency between fiscal and monetarypolicies. During these years there was a conflict between the governmentand the Bank of Italy, as the Italian government focused onexpanding the public budget and the central bank on reducing inflation.This had a strong impact on the stability of the public accounts.The third phase (1994-2007), marked by the beginning of the processof monetary and fi-scal convergence towards the Maastricht parameters.The fourth (2008-2019), which began with two finan-cial crisesand ended with deep stagnation and low inflation. During this phaseItaly suffered the negative effects of the austerity policies that affectedthe PIIGS countries. Finally, the phase associated with the pandemicand the Russian-Ukrainian conflict (2020-2023), characterized by high public debt and rising in-flation, for which we still do not have a clear picture.File | Dimensione | Formato | |
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