The Golden Age and the Second Globalization in Italy

Abstract

After the Golden Age, Italy experienced increasing difficulties in adjusting its economy to the changing external context and to the requirements for sustaining catch-up growth at a higher level of economic development. The adjustment issue is common to advanced countries but the difficulties experienced in Italy look particularly severe. Cushioned by inflation and devaluation, growth remained relatively high in the 1970s. In the subsequent decade, in spite of improved conditions for addressing macroeconomic disequilibria structural adjustments were neglected. Major supply side reforms were eventually implemented in the aftermath of the 1992 crisis. Nevertheless, in the second half of the decade growth fell below the EU average. These necessary reforms fell however short of what was required. Participation in EMU did not help as far as the improvement of growth prospects was concerned. In the last section some of the economic and meta-economic factors explaining the ineffectiveness of the reform process are briefly explored.

Persistent Productivity Failure in the UK: Is the EU Really to Blame?

“…This indicates an inability to make the reforms necessary to sustain catch-up growth in its later phases. In particular, this has included a failure to strengthen competition policy adequately (Buccirossi et al ., 2013) and to improve the quality of Italian education (Bertola and Sestito, 2013), and is underlined by Italy's dismal showing in the World Bank's Doing Business and Governance Matters rankings (Crafts and Magnani, 2013). Resource misallocation has increased substantially since the mid-1990s and has undermined productivity growth (Calligaris et al ., 2016).…”

Italy’s Growth and Decline, 1861–2011

“…In actual fact, GDP showed a miraculous trend in most countries in western Europe: not surprisingly, the period 1950-1973 became known as "Europe's golden age". For an economic history of the "Italian miracle", seeCrainz [2005] andCrafts and Magnani [2013].…”