Template-Type: ReDIF-Paper 1.0
Author-Name: Sergio Destefanis
Author-Name-First: Sergio 
Author-Name-Last: Destefanis
Author-Email:  destefanis@unisa.it 
Author-Workplace-Name: Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno
Author-Name:  Mario Di Serio
Author-Name-First: Mario 
Author-Name-Last: Di Serio
Author-Email:  mdiserio@unisa.it
Author-Workplace-Name: Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno
Author-Name:  Matteo Fragetta
Author-Name-First: Matteo 
Author-Name-Last: Fragetta
Author-Email: mfragetta@unisa.it  
Author-Workplace-Name: Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno
Title:  Regional multipliers across the Italian regions
Abstract: This paper estimates the multipliers of different types of government spending in the 20 Italian administrative regions throughout 1994–2016. To this end, we use a Bayesian random effect panel vector autoregressive model, which enables us to estimate region-specific multipliers. Our results highlight that the EU structural funds, compared to the other types of government spending, provide the largest and most widely spread GDP multipliers, whereas the effectiveness of nationally funded government investment and government consumption shocks is limited to certain regions. We also find that there exists a fair degree of substitutability between EU structural funds and other expenditure variables, which runs counter to the principle of additionality of the EU cohesion policy. Moreover, at least for some regions, private investment is crowded in by shocks to government consumption and EU structural funds and crowded out by shocks to nationally funded government investment. An exploratory analysis of the distribution of multipliers across regions and expenditure types suggests that multiplier values are positively associated with the amount of unused resources as well as with the region size. 
Length:  26 pages
Creation-Date:  2020-05
Revision-Date: 2020-05
Publication-Status: Published, Working Papers, May 2020, pages 1-26
File-URL: http://www.dises.unisa.it/RePEc/sep/wpaper/3_238.pdf
File-Format: Application/pdf
File-Function: Revised version, 2020
Number: 3_238
Classification-JEL: C33, E62, H50 
Keywords: EU structural funds, government consumption, government investment, Bayesian Vector Autoregressive Model
Handle:RePEc:sep:wpaper:3_238