AbstractThe 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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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8125.
Date of creation: Feb 2001
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Publication status: published as Sinn, Hans-Werner and Frank Westermann. "Due 'Mezzogiorni'." L'Industria, Nuova Serie 27, 1 (January-MArch 2006): 49-51.
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