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Italy's Economic Performance 1945-92


  • Rossi, Nicola
  • Toniolo, Gianni


Italy's economic performance between 1945 and 1992 is assessed in a general theoretical framework for productivity growth measurement which enables us to relax the binding assumptions of standard Solow-type neoclassical models. The paper shows that `true productivity' was of minor importance, being outweighted by economies of scale as a source of growth. Productivity gains are large in the `miracle years'; from the late 1960s onwards, productivity levels taper off and cost decreases can be entirely attributed to a combination of scale economies and short-run adjustment costs. In such a framework, we analyse Italy's post-war economic performance arguing that our results confirm the widely-held opinion that the inefficiency of the service sector, lack of competition in the sheltered sectors, powerful vested interests, outdated ideologies and corruption itself account for most of the productivity slow down that is observed after the mid-1960s.

Suggested Citation

  • Rossi, Nicola & Toniolo, Gianni, 1993. "Italy's Economic Performance 1945-92," CEPR Discussion Papers 877, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:877

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    References listed on IDEAS

    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    2. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
    3. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    4. repec:hhs:iuiwop:430 is not listed on IDEAS
    5. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
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    More about this item


    Italian Economic Growth; Measures of Productivity; Post-War Italy; Productivity Growth;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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