The misalignment of fiscal multipliers in Italian regions

This paper estimates fiscal multipliers resulting from shocks to current public expenditure, total revenues, and investment in Italian regions by accounting for the structural heterogeneity between Northern Southern economies. The estimation is carried out estimating a Bayesian panel vector autoregression, where are identified using sign restrictions suggested economic theory. results shed new light on regional shocks’ magnitude propagation. Moreover, misalignment of revealed, possibly policy relevant local central authorities.