Skip to main content
SpringerLink
Log in

Government Deficits and Debts. The Necessity and Cost of Adjustment: the Case of Italy

  • Chapter
Keynes and Economic Policy

Abstract

This chapter considers the issue of the sustainability of the public debt and the problems which arise in the medium term in connection with attempts to stabilise its growth with particular reference to the case of Italy.

What a government spends the public pay for. There is no such thing as an uncovered deficit. But in some countries it seems possible to please and content the public, for a time at least, by giving them, in return for the taxes they pay, finely engraved acknowledgements on watermarked paper. The income-tax receipts, which we in England receive from the Surveyor, we throw into the wastepaper basket; in Germany they call them bank notes and put them into their pocket-books; in France they are termed rentes and are locked up in the family safe. (J. M. Keynes, A Tract on Monetary Reform, Macmillan, 1923)

If it is accepted, the above reasoning shows how ‘wasteful’ loan expenditure (the net borrowing of public authorities on all accounts, whether on capital account or to meet a budgetary deficit) may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better. (J. M. Keynes, The General Theory, Macmillan, 1936)

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • ALESINA, A. (1987) ‘The End of Large Public Debts’, Paper prepared for the conference ‘Surviving with High Public Debts: Lessons from the Italian Experience’, Castelgandolfo (Italy), June.

    Google Scholar 

  • ALVARO, G. (1984) ‘La finanza pubblica nel sistema economico italiano’, in La finanza pubblica in Italia: steno e prospettive ( Milano: F. Angeli).

    Google Scholar 

  • ARCELLI, M. and R. VALIANI (1981) ‘Il finanziamento del fabbisogno del settore pubblico’, Rivista di politica economica, December.

    Google Scholar 

  • BAFFI, P. (1974) ‘I risparmio in Italia, oggi’, Bancaria, vol. 2, February.

    Google Scholar 

  • BANCA D’ITALIA (1986) ‘Modello trimestrale dell’economia italiana’, vols i and n, Terni di discussione, 80, December.

    Google Scholar 

  • BARNETT, W. (1980) ‘Economic Monetary Aggregates’, Journal of Econometrics, 14.

    Google Scholar 

  • BARRO, R. (1987) Macroeconomics, 2nd edn ( New York: Wiley).

    Google Scholar 

  • BLANCHARD, O. (1985) ‘Debt, Deficits, and Finite Horizons’, Journal of Political Economy, April.

    Google Scholar 

  • BLANCHARD, O., R. DORNBUSCH and W. BUITER (1985) ‘Public Debt and Fiscal Responsibility’, Ceps Papers, 22.

    Google Scholar 

  • BUITER, W. (1985) ‘A Guide to Public Sector Debt and Deficits’, Economic Policy, November.

    Google Scholar 

  • CAPRIGLIONE, F. (1987) ‘Buoni e certificati di credito del Tesoro’, Enciclopedia Giuridica.

    Google Scholar 

  • CARANZA, C. and A. FAZIO (1983) ‘L’evoluzione dei metodi di controllo monetario in Italia: 1974–1983’, Bancaria, vol. 39, pp. 819–33.

    Google Scholar 

  • CIVIDINI, A., G. GALLI and R. S. MASERA (1987) ‘Vincolo di bilancio e sostenibilità del debito: analisi e prospettive’, in Debito pubblico e politica economica in Italia, a cura di F. Bruni, Collana Giorgio Rota, Ricerca n. 1.

    Google Scholar 

  • CONFALONIERI, A. and E. GATTI (1986) ‘La politica del debito pubblico in Italia’ (Cariplo-Laterza).

    Google Scholar 

  • COTTARELLI, C., G. GALLI, P. R. MARULLO and G. PITTALUGA (1986) ‘Monetary Policy Through Ceilings on Bank Lending’, Economic Policy, 3, October.

    Google Scholar 

  • COTULA, F. and P. DE’ STEFANI (1979) La politica monetaria in Italia: istituti e strumenti ( Bologna: Il Mulino).

    Google Scholar 

  • COTULA, F. and R. S. MASERA (1980) ‘Private Savings, Public Deficits and the Inflation Tax’, Review of Economic Conditions in Italy, vol. 3, October.

    Google Scholar 

  • CUDDINGTON, J. and J. VINALS (1986) ‘Budget Deficits and the Current Account’, Journal of International Economics vol. 21.

    Google Scholar 

  • DARBY, M. R. (1984) ‘Some Pleasant Monetarist Arithmetic’, NBER Working Paper no. 1295, March.

    Google Scholar 

  • DIAMOND, P. (1965) ‘National Debt in a Neoclassical Growth of Model’, American Economic Review, vol. 5, December.

    Google Scholar 

  • DOMAR, E. (1944) ‘The Burden of the Debt and National Income’, American Economic Review, December.

    Google Scholar 

  • DORNBUSCH, R. (1986) ‘Exchange Rate Economics: 1986’, NBER Working Paper no. 2071, November.

    Book  Google Scholar 

  • EINAUDI, L. (1944) I problemi economici della Federazione europea ( Lugano: Nuove Edizioni di Capolago).

    Google Scholar 

  • FEINSTEIN, C. H. (1972) National Income Expenditure and Output (1855–1965) ( Oxford: OUP).

    Google Scholar 

  • FRANCO, D. and G. MORCALDO (1986) Un modello di previsione degli squilibri del sistema previdenziale, Ministero del Tesoro — Commissione Tecnica per la Spesa Pubblica, Istituto Poligrafico e Zecca dello Stato.

    Google Scholar 

  • FRENKEL, J. and A. RAZIN (1984) ‘Fiscal Policies, Debt and International Independence’, NBER Working Paper no. 1266.

    Book  Google Scholar 

  • FRIEDMAN, M. (1968) ‘The Role of Monetary Policy’, American Economic Review, March.

    Google Scholar 

  • GALLI, G. (1985) ‘Tarso reale, crescita e sostenibilità del debito pubblico’, Banca d’Italia, Contributi all’analisi economica, no. 1.

    Google Scholar 

  • GALLI, G. and R. S. MASERA (1983) ‘Real Rate of Interest and Public Sector Deficits: an Empirical Investigation’, Economic Notes, vol. 3.

    Google Scholar 

  • GEANAKOPLOS, J. D. and H. M. POLEMARCHAKIS (1986) ‘Walrasian Indeterminacy and Keynesian Macroeconomics’, Review of Economic Studies, vol. LIII, pp. 755–79.

    Google Scholar 

  • IBBOTSON, R. G. and R. A. SINQUEFIELD (1982) Stock, Bonds, Bills and Inflation: The Past and the Future, Charlottesville ( Va. ), The Financial Analysts Research Foundation.

    Google Scholar 

  • ISTAT (1983) ‘I conti della protezione sociale’, Supplement to the Monthly Bulletin of Statistics, no. 28.

    Google Scholar 

  • KEYNES, J. M. (1923) A Tract on Monetary Reform ( London: Macmillan).

    Google Scholar 

  • KEYNES, J. M. (1936) The General Theory of Employment, Interest and Money ( London: Macmillan).

    Google Scholar 

  • KEYNES, J. M. (1963) Essays in Persuasion ( New York: Norton).

    Google Scholar 

  • LECALDANO, E., G. MAROTTA and R. S. MASERA (1985) ‘Households’ Saving and the Real Rate of Interest: The Italian Experience, 1970–1983’, Banca d’Italia, Temi di discussione, no. 47, May.

    Google Scholar 

  • LUCAS, R. and N. STOCKEY (1983) ‘Optimal Fiscal and Monetary Policy in an Economy without Capital’, Journal of Monetary Economics, vol. 12.

    Google Scholar 

  • LUCAS, R. (1986) ‘Principles of Fiscal and Monetary Policy’, Journal of Monetary Economics, January.

    Google Scholar 

  • MASERA, R. S. (1979) ‘Disavanzo pubblico e vincolo di bilancio’ ( Milano: Edizioni di Comunità).

    Google Scholar 

  • MASERA, R. S. (1987) ‘Four Arguments for Fiscal Recovery in Italy’, in M. J. Boskin, J. S. Flemming and S. Gorini (eds), Private Saving and Public Debt ( London: Blackwell ).

    Google Scholar 

  • MITCHELL, B. R. (1962) Abstract of British Historical Statistics ( Oxford: OUP).

    Google Scholar 

  • MITCHELL, B. R. and H. G. JONES (1971) Second Abstract of British Historical Statistics ( Oxford: OUP).

    Google Scholar 

  • MODIGLIANI, F. (1961) ‘Long-Run Implications of Alternative Fiscal Policies and the Burden of the National Debt’, Economic Journal, no. 71, Dec.

    Google Scholar 

  • MODIGLIANI, F. and R. BRUMBERG (1979) ‘Utility Analysis and Aggregate Consumption Function: an Attempt at Integration’, in A. Abel (ed.), Collected Papers of Franco Modigliani, vol. 2 ( Cambridge: MIT Press ).

    Google Scholar 

  • MONTI, M., B. SIRACUSANO and P. TARDINI (1983) ‘Spesa pubblica, finanziamento del disavanzo e crowding-out’, in Spesa pubblica e sviluppo dell’economia ( Milano: Edizioni di Comunità).

    Google Scholar 

  • MORCALDO, G. and G. SALVEMINI (1984) ‘Il debito pubblico: analisi dell’evoluzione nel periodo 1960–83 e prospettive’, Rivista di politica economica, vol. 74.

    Google Scholar 

  • MORCALDO, G. and P. ZANCHI (1984) ‘Un modello di previsione del bilancio pubblico per il breve-medio termine’, Proceedings of the Perugia Conference, February 1984.

    Google Scholar 

  • SHEEN, J. (1987) ‘Inflation, Debt and Fiscal Policy Attitudes’, Oxford Economic Papers, vol. 39.

    Google Scholar 

  • SPAVENTA, L. (1984) ‘The Growth of Public Debt in Italy: Past Experience, Perspectives and Policy Problems’, Banca Nazionale del Lavoro Quarterly Review, June.

    Google Scholar 

  • SPAVENTA, L. (1987) ‘The Growth of Public Debt’, IMF Staff Papers, vol. 34, 2, June.

    Google Scholar 

  • SPAVENTA, L., R. ARTONI, G. MORCALDO and P. ZANCHI (1984) ‘L’indebitamento pubblico in Italia: evoluzione, prospettive e problemi’, Report prepared for the Commissione Bilancio of the Camera dei Deputati.

    Google Scholar 

  • VACIAGO, G. (1983) La programmazione dei flussi finanziari ( Bologna: Il Mulino).

    Google Scholar 

  • VAN WIJNBERGEN, S. (1985) ‘Oil Price Shocks, Unemployment, Investment and the Current Account: an Intertemporal Disequilibrium Analysis’, Review of Economic Studies, vol. LII.

    Google Scholar 

  • VINAMPALS, J. (1986) ‘Fiscal Policy and the Current Account’, Economic Policy, vol. 3, October.

    Google Scholar 

  • ZAUTZIK, E. (1982) ‘Base monetaria aggiustata e sue interpretazioni: aspetti teorici e applicazione al caso italiano’, Banca d’Italia, Terni di discussione, no. 15, December.

    Google Scholar 

Download references

Authors
  1. Giampaolo Galli
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rainer S. Masera
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. National Economic Development Office, Oxford, UK

    Walter Eltis (Economic Director, Fellow) (Economic Director, Fellow)

  2. Exeter College, Oxford, UK

    Walter Eltis (Economic Director, Fellow) (Economic Director, Fellow)

  3. Brasenose College, Oxford, UK

    Peter Sinclair (Fellow) (Fellow)

Copyright information

© 1988 National Economic Development Office

About this chapter

Cite this chapter

Galli, G., Masera, R.S. (1988). Government Deficits and Debts. The Necessity and Cost of Adjustment: the Case of Italy. In: Eltis, W., Sinclair, P. (eds) Keynes and Economic Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10338-6_9

Download citation

Publish with us

Policies and ethics

Search

Navigation