Le grandi Opere Pubbliche: fiscal multipliers of public infrastructure in Italy (1870–1998)

Considering the recently revived debate on the role and effectiveness of public infrastructure investment, this paper seeks to cover a gap in the empirical literature. In particular, we aim to tackle the lack of analysis of fiscal multipliers for large public infrastructure projects in Italy at the aggregate level. To do so, we combine the Jordà–Schularick–Taylor Macrohistory Dataset and ISTAT Time-series data on large public infrastructure projects to calculate fiscal multipliers of public infrastructure projects (‘opere pubbliche’) in Italy for the period 1870–1998. Taking Structural Vector Regression and Local Projections as benchmark methodologies, our results suggest that public infrastructure multipliers in Italy are higher than those found in the literature for generic public consumption and investment. In addition, our estimations show that public expenditure net of infrastructure investment multipliers, besides being much smaller compared with public infrastructure multipliers, remain above one for a reduced time-period, stressing their transitory nature.