Conflict inflation in Italy during the Golden Age. Evidence from Provincial data, 1952-1972

The Italian Golden Age (1952-1972) was characterized by a chaotic growth path, in which alternating phases of wage restraint and strong workers’ claims for redistribution regularly led to broad increases in inflation. In this context, Conflict inflation theory, which interprets inflation primarily as a cost-push phenomenon triggered by wage demands, perfectly fits the historical framework. This paper analyzes the history of inflation in Italy during the Golden Age through this approach and evaluates its validity by examining the underlying «causal chain». Provincial data are employed to exploit the wide variability of Italian regional labor markets and to assess whether different unemployment rates and conflict propensities led to divergent patterns of wage growth and inflation. The results generally confirm that economic conflict is associated with increases in wages and inflation. However, macro-regional analyses reveal that the centralizing nature of Italian unions limited variability in wage growth across the country, producing broadly similar inflationary patterns.