The sustainability of fiscal policy in Italy (1861-2012)

The aim of this paper is to analyse the sustainability of public debt in Italy during the last 150 years (1861-2012) by employing an original reconstruction of State revenues. The key economic indicators used include public debt, primary and total deficits, and nominal and real GDP rates of growth. Following the approach proposed both by Bohn (1998, 2005) and Doi et al. (2011), we test for the sustainability of public debt in Italy, comparing four different historical periods. JEL: C22, E62, H60, N1.