Italy’s financial policies in the ’Sixties

Abstract

While economists use highly complicated models and emphasise the interdependence of economic phenomena, policy-makers rely on a number of cause and effect relationships. However, the gap between theory and practise may be narrowed somewhat by simpler models based on definitional or accounting equations, supplemented by rough indications of the underlying interrelationships. These models at least offer a unifying framework for financial and monetary policies, leave to the policy-maker the necessary degree of freedom and do not encumber him with unnecessary complications. The present article suggests one such model to give an exemplary application to the Italian case during the sixties. It is an attempt to show the usefulness of an agreed financial program, quantitatively expressed and providing for the coordination of financial policies (chiefly monetary, fiscal and wage).

JEL: E52, E62, E64, E47