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Earlier versions of the papers in this volume were presented at the Banca d’Italia workshop
on “Beyond the Austerity Dispute: New Priorities for Fiscal Policy”, held in Perugia, S.A.Di.Ba.,
on 9-11 April, 2015. We wish to thank the staff of S.A.Di.Ba. for their assistance in all aspects of
the organization of the workshop.
Previous Public Finance workshops have addressed the following topics:
“Indicators of Structural Budget Balances” (1998)
“Fiscal Sustainability” (2000)
“Fiscal Rules” (2001)
“The Impact of Fiscal Policy” (2002)
“Tax Policy” (2003)
“Public Debt” (2004)
“Public Expenditure” (2005)
“Fiscal Indicators” (2006)
“Fiscal Policy: Current Issues and Challenges” (2007)
“Fiscal Sustainability: Analytical Developments and Emerging Policy Issues” (2008)
“Pension Reform, Fiscal Policy and Economic Performance” (2009)
“Fiscal Policy: Lessons from the Crisis” (2010)
“Rules and Institutions for Sound Fiscal Policy after the Crisis” (2011)
“Fiscal Policy and Growth” (2012)
“Fiscal Policy and Macroeconomic Imbalances” (2013)
“Public Finances Today: Lessons Learned and Challenges Ahead” (2014)
The proceedings are available at the Banca d’Italia website. A hard copy may be requested from:
Banca d’Italia
Biblioteca
Via Nazionale, 91
00184 Roma
Italy
The contents of this book do not commit Banca d’Italia.
Responsibility for the ideas and opinions expressed rests with the authors of the papers.
Printed by the Printing Office of Banca d’Italia, Rome, March 2016.
© 2016 Banca d’Italia
CONTENTS
Foreword
Sandro Momigliano
(Bank of Italy) ........................................................................................................... p.
9
Session 1
BUDGETARY POLICIES AND INEQUALITY
1
FISCAL CONSOLIDATION AND INEQUALITY IN ADVANCED
ECONOMIES: HOW ROBUST IS THE LINK?
Davide Furceri, João Tovar Jalles and Prakash Loungani
(International Monetary Fund) ................................................................................... p.
13
Comment
Jan Babecký
(Czech National Bank) ................................................................................................ p.
2
FUNCTIONAL INCOME DISTRIBUTION AND ITS ROLE IN EXPLAINING
INEQUALITY
Maura Francese and Carlos Mulas-Granados
(International Monetary Fund) ................................................................................... p.
3
33
37
THE EVOLUTION OF WORLD WELFARE INEQUALITY
Davide Fiaschi* e Marzia Romanelli**
( * University of Pisa)
( ** Bank of Italy) ......................................................................................................... p.
67
Comment
Nikola Altiparmakov
(Serbian Fiscal Council) ............................................................................................. p. 105
4
THE IMPACT OF INCOME INEQUALITY AND FISCAL STIMULI ON
POLITICAL (IN)STABILITY
Luca Agnello,* Vítor Castro,** João Tovar Jalles*** and Ricardo Sousa****
( * University of Palermo)
( ** University of Coimbra and University of Minho)
( *** OECD)
( **** University of Minho and London School of Economics and Political Science) . p. 109
Comment
Martin Larch
(European Commission) .............................................................................................. p. 143
5
WEALTH DISTRIBUTION AND TAXATION IN EU MEMBERS
Anna Iara
(European Commission) .............................................................................................. p. 147
Comment
Álvaro Pina
(OECD, ISEG - Lisbon School of Economics & Management, Universidade de
Lisboa, and UECE - Research Unit on Complexity and Economics, Lisboa)............. p. 181
6
PROPERTY TAX REFORM AND THE USER COST OF OWNER-OCCUPIED
HOUSING IN THE EU
Salvador Barrios, Serena Fatica and Jonathan Pycroft
(European Commission) .............................................................................................. p. 187
Comment
Pietro Tommasino
(Bank of Italy).............................................................................................................. p. 215
Session 2
PUBLIC INVESTMENT
7
PUBLIC CAPITAL IN THE 21ST CENTURY: AS PRODUCTIVE AS EVER?
Jasper De Jong,* Marien Ferdinandusse** and Josip Funda***
( * De Nederlandsche Bank)
( ** European Central Bank)
( *** Hrvatska Narodna Banka) ................................................................................... p. 221
Comment
Luiz De Mello
(OECD) ....................................................................................................................... p. 249
8
AN EMPIRICAL ANALYSIS OF THE LINK BETWEEN PUBLIC AND
PRIVATE INVESTMENT IN FOUR OECD COUNTRIES
Jérôme Creel,* Paul Hubert** and Francesco Saraceno***
( * OFCE-Sciences Po and ESCP Europe)
( ** OFCE-Sciences Po)
( *** OFCE-Sciences Po and SEP-LUISS Rome) ......................................................... p. 253
9
ASSESSING POLICY OPTIONS FOR THE EU COHESION POLICY
2014-2020
Andries Brandsma, Francesco Di Comite, Olga Diukanova, d’Artis Kancs, Jesús López
Rodríguez, Damiaan Persyn and Lesley Potters
(European Commission) .............................................................................................. p. 273
Comment
Teresa Ter-Minassian
(formerly IMF)............................................................................................................. p. 299
Session 3
OTHER FISCAL POLICY ISSUES
10 THE EFFECT OF LOW INFLATION ON PUBLIC FINANCES
Maria Grazia Attinasi,* Vladimir Borgy,** Othman Bouabdallah,*
Cristina Checherita-Westphal,* Maximilian Freier,* George Palaiodimos,***
Doris Prammer,° Pietro Tommasino°° and Jochen Zimmer°°°
( * European Central Bank)
( ** Bank of France)
( *** Bank of Greece)
( ° Bank of Austria)
( °° Bank of Italy)
( °°° Deutsche Bundesbank) ........................................................................................ p. 303
Comment
Ernesto Rezk
(University of Córdoba – Argentina)........................................................................... p. 331
11 THE WELFARE AND LABOR MARKET EFFECTS OF MANDATORY
PENSION SAVINGS: EVIDENCE FROM THE ISRAELI CASE
Adi Brender
(Bank of Israel)............................................................................................................ p. 335
Comment
Martino Tasso
(Bank of Italy).............................................................................................................. p. 365
Session 4
NEW RULES FOR EMU?
12 GORDIAN KNOT OR ARIADNE’S BALL OF THREAD? SEARCHING FOR
A WAY OUT OF THE EUROPEAN FISCAL LABYRINTH
L’udovit Odor* and Gábor P. Kiss**
( * Council for Budget Responsability – Slovakia)
( ** Magyar Nemzeti Bank) .......................................................................................... p. 369
13 REFORMING FISCAL GOVERNANCE IN THE EUROPEAN UNION
Michal Andrle, John Bluedorn, Luc Eyraud, Tidiane Kinda,
Petya Koeva-Brooks, Gerd Schwartz and Anke Weber
(International Monetary Fund) ................................................................................... p. 393
PANEL DISCUSSION
SHORTCOMINGS OF EU FISCAL RULES AND INSTITUTIONS
AND POSSIBLE WAYS FORWARD
Lucio Pench
(European Commission) .............................................................................................. p. 419
RULES VS DISCRETION IN THE EUROPEAN FISCAL FRAMEWORK
Fabrizio Saccomanni
(formerly Minister of Finance, Italy)........................................................................... p. 425
Contributors
Luca Agnello (University of Palermo)
Nikola Altiparmakov (Serbian Fiscal Council) Michal Andrle
(International Monetary Fund)
Maria Grazia Attinasi (European Central Bank)
Jan Babecký (Czech National Bank)
Salvador Barrios (European Commission)
John Bluedorn (International Monetary Fund) Vladimir Borgy
(Bank of France)
Othman Bouabdallah (European Central Bank) Andries Brandsma
(European Commission)
Adi Brender (Bank of Israel)
Vítor Castro (University of Coimbra and University of Minho)
Cristina Checherita-Westphal (European Central Bank) Jérôme
Creel (OFCE-Sciences Po and ESCP Europe) Jasper De Jong (De
Nederlandsche Bank)
Luiz de Mello (OECD)
Francesco Di Comite (European Commission)
Olga Diukanova (European Commission)
Luc Eyraud (International Monetary Fund)
Serena Fatica (European Commission)
Marien Ferdinandusse (European Central Bank) Davide Fiaschi
(University of Pisa)
Maura Francese (International Monetary Fund) Maximilian Freier
(European Central Bank)
Josip Funda (Hrvatska Narodna Banka)
Davide Furceri (International Monetary Fund)
Paul Hubert (OFCE-Sciences Po)
Anna Iara (European Commission)
João Tovar Jalles (OECD)
d’Artis Kancs (European Commission)
Tidiane Kinda (International Monetary Fund)
Gábor P. Kiss (Magyar Nemzeti Bank)
Petya Koeva-Brooks (International Monetary Fund)
Martin Larch (European Commission)
Jesús López Rodríguez (European Commission)
Prakash Loungani (International Monetary Fund)
Sandro Momigliano (Bank of Italy)
Carlos Mulas-Granados (International Monetary Fund)
Ľudovít Ódor (Council for Budget Responsibility – Slovakia)
George Palaiodimos (Bank of Greece)
Lucio Pench (European Commission)
Damiaan Persyn (European Commission)
Álvaro Pina (OECD, ISEG – Lisbon School of Economics & Management, Universidade de
Lisboa, and UECE – Research Unit on Complexity and Economics, Lisboa)
Lesley Potters (European Commission)
Doris Prammer (Bank of Austria)
Jonathan Pycroft (European Commission)
Ernesto Rezk (University of Córdoba – Argentina)
Marzia Romanelli (Bank of Italy)
Fabrizio Saccomanni (formerly Minister of Finance, Italy)
Francesco Saraceno (OFCE-Sciences Po and SEP-LUISS Rome)
Gerd Schwartz (International Monetary Fund)
Ricardo Sousa (University of Minho and London School of Economics and Political Science)
Martino Tasso (Bank of Italy)
Teresa Ter-Minassian (formerly International Monetary Fund)
Pietro Tommasino (Bank of Italy)
Anke Weber (International Monetary Fund)
Jochen Zimmer (Deutsche Bundesbank)