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Italy’s decline: getting the facts right

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  • F. Daveri
  • C. Jona-Lasinio

    ()

Abstract

The Italian economy is often said to be on a declining path. In this paper, we document that: (i) Italy’s current decline is a labor productivity problem (ii) the labor productivity slowdown stems from declining productivity growth in all industries but utilities (with manufacturing contributing for about one half of the reduction) and diminished interindustry reallocation of workers from agriculture to market services; (iii) the labor productivity slowdown has been mostly driven by declining TFP, with roughly unchanged capital deepening. The only mild decline of capital deepening is due to the rise in the value added share of capital that counteracted declining capital accumulation.

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Bibliographic Info

Paper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2006-EP01.

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Length: 45 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:par:dipeco:2006-ep01

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Keywords: Productivity growth; Productivity slowdown; TFP; decline; Italy;

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  1. Francesco Caselli & Silvana Tenreyro, 2005. "Is Poland the Next Spain?," NBER Working Papers 11045, National Bureau of Economic Research, Inc.
  2. Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995. "Capital Utilization and Returns to Scale," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 67-124 National Bureau of Economic Research, Inc.
  3. Bruno Giancarlo & Edoardo Otranto, 2004. "Dating the Italian BUsiness Cycle: A Comparison of Procedures," ISAE Working Papers 41, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  4. Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 1994. "Downsizing and Productivity Growth: Myth or Reality?," NBER Working Papers 4741, National Bureau of Economic Research, Inc.
  5. Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995. "Sectoral Solow Residuals," NBER Working Papers 5286, National Bureau of Economic Research, Inc.
  6. Antonio Bassanetti & Massimiliano Iommi & Cecilia Jona-Lasinio & Francesco Zollino, 2004. "La crescita dell'economia italiana negli anni novanta tra ritardo tecnologico e rallentamento della produttività ," Temi di discussione (Economic working papers) 539, Bank of Italy, Economic Research and International Relations Area.
  7. Torrini Roberto, 2005. "Quota dei profitti e redditività del capitale in Italia: un tentativo di interpretazione," Politica economica, Società editrice il Mulino, issue 1, pages 7-42.
  8. Jack E. Triplett & Barry P. Bosworth, 2003. "Productivity measurement issues in services industries: "Baumol's disease" has been cured," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 23-33.
  9. Domenico J. Marchetti & Francesco Nucci, 2004. "Pricing behavior and the comovement of productivity and labor: evidence from firm-level data," Temi di discussione (Economic working papers) 524, Bank of Italy, Economic Research and International Relations Area.
  10. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150, March.
  11. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
  12. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
  13. Marianne Baxter & Dorsey D. Farr, 2001. "The Effects of Variable Capital Utilization on the Measurement and Properties of Sectoral Productivity: Some International Evidence," NBER Working Papers 8475, National Bureau of Economic Research, Inc.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Zingales e 'a rivoluzzione diggitale
    by Alberto Bagnai in Goofynomics on 2014-04-29 17:32:00
  2. Macroeconomic Adjustment in the Euro Area II: Italy
    by Edward Hugh in global economy matters on 2007-06-09 11:51:00
  3. Italy's Economic Problems Under The Spotlight
    by Edward Hugh in global economy matters on 2007-02-23 04:58:00
  4. Going Dutch â?? One Possible Solution To the Euro Debt Crisis?
    by Edward Hugh in a fistful of euros on 2011-08-15 16:37:19
  5. Going Dutch – One Possible Solution To the Euro Debt Crisis?
    by ? in A Fistful Of Euros on 2011-08-15 17:37:19
  6. Macroeconomic Adjustment in the Euro Area. Part Two Italy
    by ? in Euro Watch on 2007-06-01 14:13:00
  7. Going Dutch - One Possible Solution To the Euro Debt Crisis?
    by ? in Euro Watch on 2011-08-15 15:33:00
  8. Explaining Italy's decline
    by ? in New Economist on 2006-12-14 20:00:55
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