Papers by Giovanni Ganelli
Most new EU member states (NMS) need further fiscal adjustment to support economic growth and mac... more Most new EU member states (NMS) need further fiscal adjustment to support economic growth and macroeconomic stability. In this context, achieving income convergence with other EU members rests more with maintaining productivity growth, attracting foreign savings, and improving investment efficiency than with increasing government spending (including for infrastructure). Additional institutional fiscal reforms, aimed at improving expenditure efficiency and facilitating private sector investment, will be needed to support these objectives. However, further fiscal adjustment and reforms do not necessarily need to depress public investment. New financing options for public investment - including from various EU funds and through public-private partnerships - can ease existing fiscal and macroeconomic constraints, but present both new opportunities and challenges that need to be handled carefully.
... Part of this financing has been provided by EU funds that have been directed toward projects ... more ... Part of this financing has been provided by EU funds that have been directed toward projects with a regional ... In the case of EU funds, absorbing the substantial additional resources under the new financial perspective will demand ... The rest of the paper is organized as follows. ...
Journal of International Money and Finance
We assess the ongoing reform efforts in Japan in terms of inclusive growth. We use prefectural le... more We assess the ongoing reform efforts in Japan in terms of inclusive growth. We use prefectural level panel data to regress a measure of inclusive growth, and its components of both average income growth and income inequality, on macroeconomic and policy variables. Our analysis suggests that achieving the Bank of Japan’s 2% inflation target has a positive effect on average income growth, but an adverse effect on income equality. In contrast, achieving higher female labor participation, lower duality, and larger labor input — which are included in the package of structural reforms planned under Abenomics — is found to be effective in fostering inclusive growth. While implementation of those policies can improve higher average income growth, only the female labor participation is found to improve the equality as well. The main policy implication of our analysis is that full implementation of structural reforms — especially labor market reforms — is necessary to both foster growth and increase equality.
The World Economy, 2015
ABSTRACT This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian mo... more ABSTRACT This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian model composed of a developing and an advanced region. In our baseline calibration, a revenue-neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which typically looks at tariff-tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a "point-for-point" reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue neutral reform.
Macroeconomic Dynamics, 2005
We show how introducing home bias in government spending in the redux model generates quasi neutr... more We show how introducing home bias in government spending in the redux model generates quasi neutrality of fiscal policy shocks. We offer an intuitive explanation for this result and we stress its policy implications.
Journal of Macroeconomics, 2010
ABSTRACT This paper focuses on the trade-off faced by governments in deciding the allocation of p... more ABSTRACT This paper focuses on the trade-off faced by governments in deciding the allocation of public expenditures between productivity-enhancing public infrastructures and utility-enhancing public consumption. From the modeling point of view, the paper augments a standard New Open Economy Macroeconomics (NOEM) model by introducing productive public infrastructures. The results show that a temporary increase in the domestic stock of public capital financed by a reduction in public consumption reduces domestic welfare in the short run because the temporary gains from higher productivity do not compensate domestic residents for the utility loss due to lower public consumption. If the policy shift is permanent domestic utility is likely to increase, while foreign residents suffer short-run welfare losses but benefit from welfare gains in the long run. This analysis implies that a permanent domestic reallocation of public spending might result in a virtuous global technological cycle.
FinanzArchiv: Public Finance Analysis, 2014
ABSTRACT This paper fills a gap in the literature by focusing on the degree of self-financing of ... more ABSTRACT This paper fills a gap in the literature by focusing on the degree of self-financing of tax cuts in a New Keynesian two-country model. We find that the degree of self-financing of income tax cuts is negative on impact, but it quickly becomes positive. The open-economy dimension does not matter much for the long-run degree of self-financing. This is because the main channel through which the open-economy dimension affects the results – an expenditure-switching effect stemming from exchange-rate appreciation – is not active in the new steady state, in which the economy reaches a new flexible-price equilibrium.
… analysis: theory and policy in general …, 2003
Dynamic general equilibrium analysis: the open economy dimension Philip R. Lane and Giovanni Gane... more Dynamic general equilibrium analysis: the open economy dimension Philip R. Lane and Giovanni Ganelli 1 INTRODUCTION This chapter highlights some key topics in understanding the dynamic general equilibrium (DGE) behaviour of open economies. In line with the evolution of best ...
Most new EU member states (NMS) need further fiscal adjustment to support economic growth and mac... more Most new EU member states (NMS) need further fiscal adjustment to support economic growth and macroeconomic stability. In this context, achieving income convergence with other EU members rests more with maintaining productivity growth, attracting foreign savings, and improving investment efficiency than with increasing government spending (including for infrastructure). Additional institutional fiscal reforms, aimed at improving expenditure efficiency and facilitating private sector investment, will be needed to support these objectives. However, further fiscal adjustment and reforms do not necessarily need to depress public investment. New financing options for public investment - including from various EU funds and through public-private partnerships - can ease existing fiscal and macroeconomic constraints, but present both new opportunities and challenges that need to be handled carefully.
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Papers by Giovanni Ganelli