International Monetary Fund

European University Institute and IMF Conference

Fiscal Policy, Stabilization, and Sustainability

Florence, Italy, June 6–7, 2011

Fiscal Policy, Stabilization, and Sustainability

The European University Institute (EUI), the International Monetary Fund (IMF), and the IMF Economic Review are organizing a conference on “Fiscal Policy, Stabilization, and Sustainability.”

The conference will provide a forum to discuss innovative research on fiscal policy issues and to facilitate the exchange of views among researchers and policymakers.

The conference will be hosted by the European University Institute and will take place in Florence, Italy on June 6–7, 2011.

Participation to the conference is by invitation only.


The website contains papers and web links to papers that will be presented at the Fiscal Policy, Stabilization, and Sustainability Conference. The views expressed in these papers are those of the authors only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the papers.



Fiscal Policy, Stabilization and Sustainability Conference
Florence, Italy
June 6–7, 2011

Monday, June 6




Welcoming Remarks — Giancarlo Corsetti


Session 1: Transmission of Fiscal Policy

Chair: Pierre-Olivier Gourinchas (UC Berkeley; Editor, IMF Economic Review)

Country Heterogeneity and the International Evidence on the Effects of Fiscal Policy

Carlo Favero (Universitá Bocconi), Francesco Giavazzi (Università Bocconi), and Jacopo Perego (Università Bocconi) PresentationDiscussion of "Country Heterogeneity and the International Evidence on Effects of Fiscal Policy"

Carlo Favero (Universitá Bocconi), Francesco Giavazzi (Università Bocconi), and Jacopo Perego (Università Bocconi)

Discussant: Morten Ravn (University College London)

How Big (Small?) are Fiscal Multipliers

Ethan Ilzetzki (London School of Economics), Enrique G. Mendoza (University of Maryland), and Carlos A. Végh (University of Maryland)

Discussant: Antonio Fatás (INSEAD)


***Lunch Break***


Session 2: Unconventional Monetary and Fiscal Policies

Chair: Francesco Giavazzi (Università Bocconi)

Unconventional Fiscal Policy at the Zero Bound

Isabel Correia (Banco de Portugal and Universidade Catolica Portuguesa), Emmanuel Farhi (Harvard University), Juan Parlo Nicolini (FRB of Minneapolis and Universidad Di Tella), and Pedro Teles (Banco de Portugal and Universidade Catolica Portuguesa and CEPR)

Discussant: Gauti Eggertsson (Federal Reserve Bank of New York)

Exit Strategies

Ignazio Angeloni (ECB), Ester Faia (Goethe University Frankfurt, Kiel IfW and CEPREMAP), and Roland Winkler (Goethe University Frankfurt)

Discussant: Pierpaolo Benigno (LUISS “Guido Carli”)


***Coffee Break***


Session 3: Local Multipliers and Financial Stability

Chair: M. Ayhan Kose (IMF; Co-Editor, IMF Economic Review)

Mafia and Public Spending: Evidence on the Fiscal Multiplier from a Quasi-experiment

Antonio Acconcia (University of Naples Federico II and CSEF), Giancarlo Corsetti (EUI and Cambridge University), and Saverio Simonelli (University of Naples Federico II and CSEF)

Discussant: Luigi Guiso (European University Institute)

Financial Cycles and Fiscal Cycles

Agustín S. Bénétrix (Trinity College Dublin) and Philip R. Lane (Trinity College Dublin)

Discussant: Ugo Panizza (UNCTAD)


***Conference Dinner***

(By Invitation Only - Villa Schifanoia)


Speaker: Vittorio Grilli

Tuesday, June 7




Session 4: Debt and Redistribution

Chair: Ramon Marimon (EUI)

Redistribution and the Multiplier

Tommaso Monacelli (Universitá Bocconi) and Roberto Perotti (Università Bocconi) PresentationDiscussion of "Redistribution and the Multiplier"

Tommaso Monacelli (Universitá Bocconi) and Roberto Perotti (Università Bocconi)

Discussant: Florin Bilbiie (Paris School of Economics)

Historical Patterns of Public Debt – Evidence From a New Database

S. M. Ali Abbas (IMF), Nazim Belhocine (IMF), Asmaa ElGanainy (IMF), and Mark Horton (IMF)

Discussant: Moritz Schularick (Freie Universität Berlin)


***Coffee Break***


Session 5: Fiscal Policy and Crisis

Chair: Giorgia Giovannetti (EUI)

130 Years of Fiscal Deficits and Currency Crashes in Advanced Economies

Marcel Fratzscher (ECB), Arnaud Mehl (ECB), and Isabel Vansteenkiste (ECB)

Discussant: Albrecht Ritschl (London School of Economics)

Sudden Stops and Sovereign Defaults

Ana Fostel (GWU), Luis Catao (IMF), and Romain Ranciere (IMF)

Discussant: Mark Aguiar (University of Rochester)


***Lunch Break***


Session 6: Twin Deficits

Chair: Giancarlo Corsetti (EUI and Cambridge University)

Fiscal Policy and the Current Account

S. M. Ali Abbas (IMF), Jacques Bouhga-Hagbe (IMF), Antonio Fatás (INSEAD), Paolo Mauro (IMF), and Ricardo Velloso (IMF)

Matthieu Bussiere (Banque de France) PresentationDiscussant: Matthieu Bussiere (Banque de France)

Revisiting the Twin Deficits Hypothesis: The Effect of Fiscal Consolidation on the Current Account

John Bluedorn (IMF) and Daniel Leigh (IMF)

Discussant: Roel Beetsma (University of Amsterdam)


***Coffee Break***


Fiscal Policy Issues for the Euro-area: Is the Worst Behind Us?

Moderator: Philip Gerson (IMF)


1. Olivier Blanchard (IMF)

2. Luis Garicano (London School of Economics)

3. Roberto Perotti (Università Bocconi)

4. Jakob von Weizsäcker (Thuringian Ministry of Economy)


Closing Remarks — Josep Borrell, EUI President


Conference Program Committee

Giancarlo Corsetti (Cambridge University and EUI), Pierre-Olivier Gourinchas (University of California at Berkeley and Editor of the IMF Economic Review), and M. Ayhan Kose (IMF)

Conference Coordinator: Tracey Lookadoo