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The outbreak of Covid-19 has played the role of a ‘game changer’ in the way countries of the Eurozone have faced the economic consequences of the pandemic crisis. This paper investigates what has happened to the interest rates of the sovereign bond in selected countries of the Eurozone during 2020. While the pandemic crisis can be interpreted as a symmetric shock, we found some important asymmetric consequences both in the sovereign bond market and the credit default swap market. Even though the European Central Bank (ECB) has played a fundamental role in easening tensions, especially with the announce of the Pandemic Emergency Purchase Programme (PEPP), countries with a higher pre-Covid level of the debt-to-GDP ratio have been found to undergo a significant jump in interest rates and a greater perceived risks of default. Important policies implications emerge in relation to the future role of the ECB.

There is widespread evidence that smoking is more spread among the least well-off, but few studies investigate the effects of the differentiation of smoking products. This paper provides new evidence on income related inequality of five different products using a database from the Italian Population Survey on Alcohol and other Drugs. In particular, we use the 2014 and 2018 surveys to estimate how the consumption of manufactured cigarettes, roll-your-own cigarettes, cigars, pipe, and e-cigarettes is distributed across the income scale. The results confirm the existing evidence that the use of manufactured and roll-your-own cigarettes is more concentrated among the poor, while the use of cigars and pipe tends to be more concentrated among richer individuals. On the other hand, an important result emerges that the use of electronic cigarettes appears to be more concentrated among the poor, giving support either to the possibility that e-cigs may induce entry into smoking at cheaper prices for less affluent people or that it helps downtrading and quitting of traditional smokers in the lowest part of the income distribution. In both cases, the policy implications, for example of how to tax these alternative products, are relevant, especially because individual socio-economic characteristics (gender, income, education, working condition and geographical location) play a significant and differentiated role across smoking products.

This paper investigates the association between income and the habit of smoking in 30 European countries. Using the European Health Interview Survey carried out between 2013 and 2015, the analysis focuses on the relationship among net monthly equivalised income of the household, the type of smoking behaviour, and the daily average number of cigarettes smoked. Income-related inequalities are estimated using the Erreygers Index. Results show that smoking is a habit which is mainly rooted in the lowest part of the income distribution both at individual and country level, regardless of the average level of per capita income. Considering that tobacco use worsens poverty conditions by diverting household spending from basic needs to tobacco itself, our results give support to a tax increase in order to discourage its use and to the implementation of educational and prevention programs aimed at helping people to quit smoking.

The economic literature presents a large heterogeneity of results concerning the impact of fiscal variables on interest rates. Focusing on the Italian economy and considering the nature of our interest rate determinants (public finance variables and nominal GDP growth), we decided to undertake a cointegration analysis relying on the Autoregressive Distributed Lag (ARDL) bound test approach, a particularly suitable procedure within this framework that is able to disentangle short-run and long-run dynamics. Our results are quite controversial, shedding new light on the role of gross debt and primary balance as a share of GDP in relation to the long-term Italian nominal interest rate. In this context, the ECB has probably played a crucial role, especially in the most severe phases of the Sovereign debt crisis. The European fiscal framework then shows further critical issues in relation to the new role that fiscal variables play in our econometric analysis.

Since the Maastricht Treaty, increasingly complex fiscal rules have been progressively introduced aimed at closely regulating and deeply affecting the budgetary policies of all signatory countries. One of the main reforms, enacted since 2005, has been to interpret national budget balances in structural terms, forcing each member state to comply with a Medium-Term Objective (MTO) based on the general principle of a zero-structural budget balance. Starting from the standard European Commission methodology for calculating the structural budget, our paper shows that, by replacing the estimate of the potential output based on the NAWRU with a different notion and measure of potential output, the results in terms of fiscal policy space are significantly different. This outcome points out the distinct possibility that the actual fiscal policies of the member states of the EU may be driven and constrained by a measure that seriously limits their flexibility by several percentage points. While our empirical calculations refer to Italy, the point we address is general and relates to all member states, particularly those that in the past have been forced to restrictive policies while in recession.

This paper investigates the association between income and the habit of smoking in 30 European countries. Using the European Health Interview Survey carried out between 2013 and 2015, the analysis focuses on the relationship among net monthly equivalised income of the household, the type of smoking behaviour, and the daily average number of cigarettes smoked. Income-related inequalities are estimated using the Erreygers Index. Results show that smoking is a habit which is mainly rooted in the lowest part of the income distribution both at individual and country level, regardless of the average level of per capita income. Considering that tobacco use worsens poverty conditions by diverting household spending from basic needs to tobacco itself, our results give support to a tax increase in order to discourage its use and to the implementation of educational and prevention programs aimed at helping people to quit smoking.

In the economic literature, there has been a large heterogeneity of results in relation to the impact of fiscal variables on interest rates. Focusing on the Italian economy and considering the nature of our interest rate determinants (public finance variables and nominal GDP growth), we decided to undertake a cointegration analysis relying on the Autoregressive Distributed Lag (ARDL) bound test approach, a particular suitable procedure within this peculiar framework, able to disentangle short-run and long-run dynamics. Our results are quite controversial, shedding new light on the role of gross debt and primary balance as a share of GDP in relation to the long-term Italian nominal interest rate. In this context, the ECB has probably played a crucial role, especially in the most severe phases of the Sovereign debt crisis. The European fiscal framework then shows further critical issues in relation to the new role that fiscal variables play within our econometric analysis.

This paper presents novel estimates for the cyclically-adjusted primary balance for 18 countries of the Euro area over years 1999–2017. We improve the methodology adopted by the European Commission by using quarterly rather than annual frequency data and providing accurate identification of the budgetary items whose response can be considered automatic to the economic cycle. This disaggregated outcome combined with high frequency data marks a significant improvement with respect to previous studies. The empirical analysis is implemented on two sub-periods to examine the impact of governments’ discretionary fiscal policy before and after the Great Recession. The most striking policy implication is that even though the budgetary policy of most European countries can be qualified in principle as anticyclical, this outcome has been weakened by the impact of discretionary policies of many governments especially after the crisis. The results are robust to the use of different de-trending methods.

The taxation of tobacco products is part of a regulatory framework de ned by the European Directive 64/2011. As for traditional cigarettes, Italy is characterized by an unbalanced taxation structure where the ad valorem compo- nent is signi cantly high. This imbalance appears almost unique when compared with the rest of the European countries. Furthermore, while the traditional tobacco products are well regulated by the European Directive 64/2011, new alternative products, such as electronic cigarettes and heated tobacco, have introduced new challenges in terms of regulation and taxation. In Italy, these products have a differential treatment compared with the traditional ones and are characterized by a signi cant lower incidence of the level of taxation. At the international level, a relevant fragmentation emerges, in particular for what concerns the level of taxation, giving rise to strong distortions in the markets of these products, which suggests the need for a comprehensive and harmonized reorganization at the European level, an issue on which the present paper suggests some proposals.

Since the second half of the 1990s, with the beginning of the monetary unification process, interest expenditure has known a significant decrease both in absolute terms and in relation to GDP. The crisis of 2008 and the successive one of sovereign debts do not change the underlying trend of this variable but they significantly affect the width and the frequency of its cyclical fluctuations. From this point of view, in the new millennium, cyclical interest expenditure is characterized by significant pro-cyclicality. This connection, however, has lost its significance since the second half of 2012, when the President of the ECB, Mario Draghi, pronounced the “whatever it takes” speech. The evolution of the average return paid on newly issued securities was the fundamental determinant of the connection between interest expenditure and the economic cycle, although the emissions were always concentrated in the phases in which the yield was lower.

The cyclically adjusted budget balance: An empirical analysis of the Italian case This article presents an estimate of the cyclically-adjusted primary balance in Italy during the new Millennium (1999-2016) in order to assess the fiscal policy stance pursued during the period considered. If it is possible to initially qualify the fiscal policy as counter-cyclical, when the correction is made for the cycle, the budget balance becomes completely acyclical. Therefore, once the budget balance has been adjusted for the automatic influences deriving from the fluctuations of the economic cycle, the discretion of the Government has been explained in the weakening of the original anti-cyclical nature of the fiscal policy. Repeating the analysis in two different sub-periods with the 2008 crisis as a watershed, it emerged that this discretionary reductionist intervention has focused more on the period following the outbreak of the crisis, which highlights how discretionary fiscal policy has failed its expansive contribution in the most difficult moments of the crisis.