Main Drivers of the Recent Decline in Italy's Non-Construction Investment

Busetti, Fabio; Giordano, Claire; Zevi, Giordano

doi:10.2139/ssrn.2649939

Cited by 4 publications

(12 citation statements)

References 13 publications

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“…Annual average changes are taken for each sub-period; similar results are obtained when considering cumulative changes over each sub-period. See Busetti et al (2015) for a similar analysis conducted also for France, Germany and Spain. 8 Rounding up leads to small discrepancies between the aggregate investment rate and the sum of the "within" and "between" effects.…”

Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

“…6 Since the mid-Nineties the sectorial breakdown of gross fixed tangible nonconstruction capital formation has been stable in Italy (Table 3, figures in brackets). Industry is the key sector in tangible non-construction investment, undertaking on average around 39 per cent of total expenditure, which is also a large share in an international comparison (Busetti et al 2015). Conversely, the weight of private (regulated and unregulated) services is relatively low, as is public investment spending, owing to fiscal consolidation that began in the mid-Nineties.…”

Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

“…over 2 percentage points) of the total-economy investment rate decline, against a negative contribution of industry of less than 0.5 percentage points, notwithstanding its roughly equivalent weight. The "between effect"-which reflects the tendency to a reallocation of value 6 The analysis for intangible expenditure may be found in Busetti et al (2015). 7 The shift-share analysis of this section is conducted on current price series, owing to non-additivity of constant price series.…”

Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

“…10 A comparison between the declarations of surveyed manufacturing firms on their realized investment and comparable national account data shows that the EC Investment Survey is particularly informative in the case of France and Germany, less telling for Italy-for which the Bank of Italy's yearly Survey of Industrial and Service Firms (Invind) conducted in spring is more indicative-and not very useful for Spain. See Busetti et al (2015) for further details.…”

Section: Economic Drivers Of Italy's Investment Decline According To mentioning

confidence: 99%

“…It must be said, however, that investment data disaggregated by asset type and by manufacturing branch are only available until 2012, thereby losing out on another two recessionary years.29 See the definition employed inBusetti et al (2015).…”

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The Drivers of Italy’s Investment Slump During the Double Recession

2016

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This paper examines the causes of the exceptionally marked fall in nonconstruction investment in Italy since 2007. In terms of sector-specific contributions, non-financial private services accounted for most of the decline in the aggregate investment rate, but the reallocation of value added away from industry was also a drag on investment. In concordance with survey findings, an aggregate econometric model of investment indicates that even during the recent double recession the most important driver of capital accumulation was demand conditions. Regarding other determinants of investment it is found that: (i) the user cost of capital had a substantial negative impact in the acute phases of the sovereign debt crisis, but since 2013 its contribution has turned positive; (ii) the constraints imposed by tight credit supply conditions were particularly severe in 2009 and 2012; (iii) uncertainty provided a sizeable drag on investment growth not only during the global financial crisis but also in 2013-2014, being one of the main factors behind the delayed recovery of the Italian economy from the sovereign debt crisis. The significance of these determinants of investment is confirmed also by a disaggregated panel data analysis for thirteen manufacturing branches.

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Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

Section: Sectorial Drivers Of Italy's Investment Downturnmentioning

confidence: 99%

Section: Economic Drivers Of Italy's Investment Decline According To mentioning

confidence: 99%

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The Drivers of Italy’s Investment Slump During the Double Recession

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The Impact of Macroeconomic Uncertainty on Activity in the Euro Area

Gieseck

Largent

2016

Review of Economics

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The impact of macroeconomic uncertainty on activity has been a subject of heightened interest in recent years. Empirical literature typically focuses on the US or on individual euro area countries by using the VAR approach. However, there is limited quantitative evidence about the impact of uncertainty on euro area activity available as yet. In this paper, we derive measures of macroeconomic uncertainty in the euro area from an encompassing dataset, and single out some indicators of uncertainty based on theoretical plausibility and empirical evidence. From this set of indicators, we derive an aggregate measure of macroeconomic uncertainty in the euro area. Using a multivariate structural VAR approach, we then offer some quantitative evidence on the impact of macroeconomic uncertainty on euro area activity during the period 1999–2015. Our main findings show that heightened macroeconomic uncertainty, as measured by the proposed indicators, does have a strongly adverse impact on activity in the euro area, albeit the deepness and duration of the shocks differ somewhat across uncertainty measures.

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Investment and Investment Financing in Italy: Some Evidence at the Macro Level

2016

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We analyse the developments of investment and investment financing in Italy since 1995, based on data from national accounts and the flow of funds. The exceptional fall in investment after the global financial crisis in 2007 concerned all institutional sectors and asset categories. However, appropriately deflated data highlight the more intense fall of household capital expenditure. Consistently, on the asset side, construction was one of the most hard-hit capital goods; ICT and intangible investment instead weathered the double recession better. Focusing on investment financing, the eruption of the crisis caused a major contraction in the availability of external finance for non-financial corporations and households. Long-term loans to non-financial corporations became more important, crowding out their short-term counterparts. Also the weight of debt securities increased significantly, especially after 2008.

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Main Drivers of the Recent Decline in Italy's Non-Construction Investment

Cited by 4 publications

References 13 publications

The Drivers of Italy’s Investment Slump During the Double Recession

The Drivers of Italy’s Investment Slump During the Double Recession

The Impact of Macroeconomic Uncertainty on Activity in the Euro Area

Investment and Investment Financing in Italy: Some Evidence at the Macro Level

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