Two Italian Puzzles: Are Productivity Growth and Competitiveness Really so Depressed?
AbstractThis paper focuses on two apparent puzzles for the Italian economy: i) How can an extremely poor performance in productivity growth be compatible with strong employment growth?; and ii) How can a sharp decline in competitiveness come along with higher export prices and a general situation for exporters that looks far from desperate? Some possible explanations to these puzzles are presented in this paper. Special factors such as regularisation of immigrant workers and the entry of low-skilled workers into the labour market may have contributed to depressing measured productivity and overstating the loss in competitiveness. Against the backdrop of Italy?s structural problems, this paper asks whether the Italian economy can adjust and grow. Medium-term prospects for the Italian economy remain challenging: for instance, growth in total factor productivity is still disappointingly low and competitiveness keeps deteriorating. However, there have been encouraging signs of improvement, notably the labour market has performed well over the past few years and in response to pressures from fierce foreign competition some adjustment appears to have taken place in the exposed sectors.
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Bibliographic InfoPaper provided by Department of the Treasury, Ministry of the Economy and of Finance in its series Working Papers with number wp2009-2.
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Productivity; Unit Labour Costs; Competitiveness;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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- Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013.
"Structural reforms and the potential effects on the Italian economy,"
Journal of Policy Modeling,
Elsevier, vol. 35(1), pages 88-109.
- Barbara Annicchiarico & Fabio Di Dio & Francesco Felici, 2012. "Structural Reforms and the Potential Effects on the Italian Economy," CEIS Research Paper 227, Tor Vergata University, CEIS, revised 29 Mar 2012.
- Birolo, Adriano, 2009.
"Dalla crisi allo sviluppo: quali strategie per le PMI?
[From the crisis to the growth. Policies to sustain the SM firms]," MPRA Paper 31082, University Library of Munich, Germany.
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