Pietro Dallari's Books

Fiscal Spillovers in the Euro Area: Letting the Data Speak

By: Ms.Era Dabla-Norris,Pietro Dallari,Mr.Tigran Poghosyan

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Fiscal Spillovers in the Euro Area: Letting the Data Speak

By: Ms.Era Dabla-Norris,Pietro Dallari,Mr.Tigran Poghosyan

We estimate a panel VAR model that captures cross-country, dynamic interlinkages for 10 euro area countries using quarterly data for the period 1999-2016. Our analysis suggests that fiscal spillovers are significant and tend to be larger for countries with close trade and financial links as well, as for fiscal shocks originating from larger countries. The current account appears to be the main channel of transmission, although strong trade integration among countries in the euro area and spillback effects tend to zero-out the net trade impact in some cases. A subsample analysis shows that the effects of fiscal policy have changed over time, with larger estimated domestic multipliers and spillovers between 2011 and 2014.

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International Monetary Fund

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ISBN 10

1484328264

ISBN 13

9781484328262

Pouring Oil on Fire: Interest Deductibility and Corporate Debt

By: Pietro Dallari,Mr.Nicolas End,Fedor Miryugin,Alexander F. Tieman,Mr.Seyed Reza Yousefi

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Pouring Oil on Fire: Interest Deductibility and Corporate Debt

By: Pietro Dallari,Mr.Nicolas End,Fedor Miryugin,Alexander F. Tieman,Mr.Seyed Reza Yousefi

This paper investigates the role of tax incentives towards debt finance in the buildup of leverage in the nonfinancial corporate (NFC) sector, using a large firm-level dataset. We find that so-called debt bias is a significant driver of leverage, for both small and medium-sized enterprises and larger firms, with its effect accounting for about a quarter of leverage. The strength of this effect differs with firm size, the availability of collateral, income and income volatility, cash flow, and capital intensity. We conclude that leveling the playing field between debt and equity finance through tax policy reform would decrease NFC leverage, reducing economic risks posited by leverage.

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International Monetary Fund

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ISBN 10

1484389107

ISBN 13

9781484389102

Fiscal Policies in High Debt Euro-Area Countries

By: Antonella Cavallo,Pietro Dallari,Antonio Ribba

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Fiscal Policies in High Debt Euro-Area Countries

By: Antonella Cavallo,Pietro Dallari,Antonio Ribba

This book explores the role of national fiscal policies in a selected group of Euro-area countries under the European Economic and Monetary Union (EMU). In particular, the authors characterize the response of output to fiscal consolidations and expansions in the small Euro-area open economies affected by high public and private debt. It is shown that the macroeconomic outcome of fiscal shocks is strongly related to debt levels. The Euro-area countries included in the investigation are Greece, Ireland, Italy, the Netherlands, Spain, and Portugal, over the sample period 1999–2016, i.e., the EMU period. The main econometric tools used in this research are structural vector autoregressive (VAR) models, including panel VAR models. The available literature relating to the subject is also fully reviewed. A further closely investigated topic is the potential spillover effects of German fiscal policies on the selected small Euro-area economies. Moreover, in the perspective of the evolution of the Euro Area towards a full Monetary and Fiscal Union, the authors study the effects of area-wide government spending shocks on aggregate output and other macroeconomic variables during the EMU period. The closing chapter of the book considers evidence on the consequences of austerity policies for European labour markets during recent years.

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