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Two Mezzogiornos

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Hans-Werner Sinn
Frank Westermann

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Abstract

The analogy between the economic problems of the Mezzogiorno region and East Germany has been initially contested by many authors. This paper argues that there are striking similarities in the two regions, in terms of the causes of their economic predicament. With an aggregate labour productivity of 55% relative to the rest of the country, both are true transfer economies, whose consumption exceeds production by far. Beyond locational disadvantages, the present paper identifies overdrawn wages, high social security spending and the Dutch disease problem as core reasons for the poor economic performance and discusses possible cures.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8125.

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Date of creation: Feb 2001
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Handle: RePEc:nbr:nberwo:8125

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  1. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173. [Downloadable!] (restricted)
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  2. Boltho, Andrea & Carlin, Wendy & Scaramozzino, Pasquale, 1997. "Will East Germany Become a New Mezzogiorno?," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 241-264, June. [Downloadable!] (restricted)
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  3. Faini, Riccardo & Galli, Giampaolo & Gennari, Pietro & Rossi, Fulvio, 1997. "An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions," European Economic Review, Elsevier, vol. 41(3-5), pages 571-579, April. [Downloadable!] (restricted)
  4. Michael Bruno & Jeffrey Sachs, 1982. "Energy and Resource Allocation: A Dynamic Model of the "Dutch Disease"," NBER Working Papers 0852, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Sinn, Hans-Werner, 2000. "Germany's Economic Unification. An Assessment after Ten Years," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  6. Cheung, Yin-Wong & Lai, Kon S, 1995. "Lag Order and Critical Values of the Augmented Dickey-Fuller Test," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(3), pages 277-80, July.
  7. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Taylor, Jim & Bradley, Steve, 1997. "Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and the UK," Kyklos, Blackwell Publishing, vol. 50(2), pages 221-45.
  9. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
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  10. Faini, R. & Galli, G. & Giannini, C., 1992. "Finance and Development : the Case of Southern Italy," Papers 170, Banca Italia - Servizio di Studi.
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  11. van Wijnbergen, Sweder J G, 1984. "The 'Dutch Disease': A Disease after All?," Economic Journal, Royal Economic Society, vol. 94(373), pages 41-55, March. [Downloadable!] (restricted)
  12. Hans-Werner Sinn, 1996. "International Implications of German Unification," NBER Working Papers 5839, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Eswar Prasad & Francesca Utili, 1998. "The Italian Labor Market: Stylized Facts, Institutions, and Directions for Reform," IMF Working Papers 98/42, International Monetary Fund.
  14. Bruno, Michael & Sachs, Jeffrey, 1982. "Energy and Resource Allocation: A Dynamic Model of the "Dutch Disease"," Review of Economic Studies, Blackwell Publishing, vol. 49(5), pages 845-59, Special I. [Downloadable!] (restricted)
  15. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sinn, Hans-Werner & Ochel, Wolfgang, 2003. "Social Union, Convergence and Migration," Discussion Papers in Economics 948, University of Munich, Department of Economics. [Downloadable!]
  2. Ugo Fratesi, 2008. "Regional policy from a supra-regional perspective," The Annals of Regional Science, Springer, vol. 42(3), pages 681-703, September. [Downloadable!] (restricted)
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  3. Basile, Roberto & Padoa Schioppa, Fiorella Kostoris, 2002. "Unemployment Dynamics of the 'Mezzogiornos of Europe': Lessons for the Mezzogiorno of Italy," CEPR Discussion Papers 3594, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Hans-Werner Sinn & Wolfgang Ochel, 2003. "Social Union, Convergence and Migration," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  5. Hans-Werner Sinn & Michael Reutter, 2001. "The Minimum Inflation Rate for Euroland," NBER Working Papers 8085, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Andrea Vaona & Guido Ascari, 2007. "Regional Inflation Persistence: Evidence from Italy," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0807, Biblioteca universitaria di Lugano (University Library of Lugano). [Downloadable!]
  7. Christian Merkl & Dennis J. Snower, 2007. "Escaping the Unemployment Trap — The Case of East Germany," Kiel Working Papers 1309, Kiel Institute for the World Economy. [Downloadable!]
  8. Franz Kronthaler, 2005. "Economic capability of East German regions: results of a cluster analysis," Regional Studies, Taylor and Francis Journals, vol. 39(6), pages 739-750, August. [Downloadable!] (restricted)
  9. Ignacio Ortuño Ortín & Klaus Desmet, 2006. "Rational Underdevelopment," Working Papers. Serie AD 2006-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
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