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The Evolution of the World Trade and the Italian ‘Anomaly’: A New Look

  • Michele Di Maio

    (University of Macerata)

  • Federico Tamagni

    (Sant’Anna School of Advanced Studies)

This work provides an empirical assessment of the ’sophistication’ of the Italian international specialization pattern and of its evolution during the period 1980−2000. In particular we discuss the Italian ’anomaly’, i.e. the evidence that Italy displays a specialization pattern more similar to the one of emerging economies than to the one of countries of comparable level of per-capita income. We show that combining the information coming from a new index measuring the income/productivity content of traded goods, i.e. the PRODY index recently proposed in Hausmann et al. (2005), with the index of Revealed Comparative Advantages (RCA) can shed light on the Italian anomaly. We begin providing a detailed picture of the theoretical and empirical characteristics of the PRODY index. In particular we calculate the index for 1980, 1990 and 2000 mapping its dynamics through that period. Then we describe the characteristic and evolution of the Italian RCA using both parametric and non parametric techniques finding that the Italian pattern of specialization is particularly persistent. Finally, we describe the co-evolution of the PRODY and of the RCA indexes. Our analysis shows that in the last two decades, the world trade has been rapidly changing with Italy becoming increasingly more competitive and specialized in products that are characterized by decreasing income/productivity levels. Thus, while the Italian ’anomaly’ was not a problem in the past, it may have become an obstacle to future growth.

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File URL: http://www.dagliano.unimi.it/media/WP2007_227.pdf
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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 227.

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Length: 26
Date of creation: 26 Feb 2007
Date of revision:
Handle: RePEc:csl:devewp:227
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  1. Luca De Benedictis & Massimo Tamberi, 2004. "Overall Specialization Empirics: Techniques and Applications," Open Economies Review, Springer, vol. 15(4), pages 323-346, October.
  2. Dalum, Bent & Laursen, Keld & Verspagen, Bart, 1999. "Does Specialization Matter for Growth?," Industrial and Corporate Change, Oxford University Press, vol. 8(2), pages 267-88, June.
  3. Andrea Brasili & Paolo Epifani & Rodolfo Helg, 1999. "On the dynamics of trade patterns," LIUC Papers in Economics 61, Cattaneo University (LIUC).
  4. Luca De Benedictis, 2005. "Three Decades of Italian Comparative Advantages," The World Economy, Wiley Blackwell, vol. 28(11), pages 1679-1709, November.
  5. Robert C. Feenstra & Andrew K. Rose, 1997. "Putting Things in Order: Patterns of Trade Dynamics and Growth," NBER Working Papers 5975, National Bureau of Economic Research, Inc.
  6. Luca De Benedictis & Marco Gallegati & Massimo Tamberi, 2007. "Semiparametric analysis of the specialization-income relationship," Applied Economics Letters, Taylor & Francis Journals, vol. 15(4), pages 301-306.
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