Are EU Policies Effective to Tackle the Covid-19 Crisis? The Case of Italy

In response to the economic crisis unleashed by Covid-19 pandemic, EU authorities have launched extraordinary fiscal and monetary measures in support of member states. The impact these is great significance for Italy, third-largest economy, which as a result pandemic has suffered dramatic decline GDP, further rise government debt GDP ratio. Building on stock-flow consistent, structural macro-econometric model, this paper shows that currently planned are insufficient boost recovery Italian ensure sustainability its debt. also assesses two potential alternative policies. A consolidation (i.e. austerity) policy would exacerbate deteriorate By contrast, money-financed stimulus could lead economy path sustainable growth, with positive outcomes employment finances.