IDEAS home Printed from https://ideas.repec.org/p/igi/igierp/301.html
   My bibliography  Save this paper

Italy’s Decline: Getting the Facts Right

Author

Listed:
  • Francesco Daveri
  • Cecilia 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.

Suggested Citation

  • Francesco Daveri & Cecilia Jona-Lasinio, 2005. "Italy’s Decline: Getting the Facts Right," Working Papers 301, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:301
    as

    Download full text from publisher

    File URL: https://repec.unibocconi.it/igier/igi/wp/2005/301.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Francesco Caselli & Silvana Tenreyro, 2006. "Is Poland the Next Spain?," NBER Chapters, in: NBER International Seminar on Macroeconomics 2004, pages 459-533, National Bureau of Economic Research, Inc.
    2. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    3. Giancarlo Bruno & Edoardo Otranto, 2003. "Dating the Italian Business Cycle: A Comparison of Procedures," Econometrics 0312003, University Library of Munich, Germany.
    4. Antonio Bassanetti & Massimiliano Iommi & Cecilia Jona-Lasinio & Francesco Zollino, 2004. "La crescita dell'economia italiana negli anni novanta tra ritardo tecnologico e rallentamento della produttivit�," Temi di discussione (Economic working papers) 539, Bank of Italy, Economic Research and International Relations Area.
    5. 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.
    6. Edwin R. Dean & Kent Kunze, 1992. "Productivity Measurement in Service Industries," NBER Chapters, in: Output Measurement in the Service Sectors, pages 73-107, National Bureau of Economic Research, Inc.
    7. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
    8. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
    9. 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.
    10. Roberto Torrini, 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.
    11. Baily, Martin Neil & Bartelsman, Eric J & Haltiwanger, John, 1996. "Downsizing and Productivity Growth: Myth or Reality?," Small Business Economics, Springer, vol. 8(4), pages 259-278, August.
    12. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
    13. 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.
    14. 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.
    15. Burnside, A. Craig & Eichenbaum, Martin S. & Rebelo, Sergio T., 1996. "Sectoral Solow residuals," European Economic Review, Elsevier, vol. 40(3-5), pages 861-869, April.
    16. Barry P. Bosworth & Jack E. Triplett, 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.
    17. Francesco Daveri & Olmo Silva, 2004. "Not only Nokia: what Finland tells us about new economy growth [‘The role of Nokia in the Finnish economy’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 19(38), pages 118-163.
    18. Mayes,David G. (ed.), 1996. "Sources of Productivity Growth," Cambridge Books, Cambridge University Press, number 9780521554374, September.
    19. Francesco Daveri & Olmo Silva, "undated". "Not Only Nokia," Working Papers 222, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Venturini, 2005. "How Much Does IT Consumption Matter for Growth? Evidence from National Accounts," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 57-110, January-F.
    2. Serge SHIKHER, 2010. "Technology, factor endowments, and specialization in OECD countries: the role of variable capital utilization," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    3. Prasanna Tambe & Lorin M. Hitt, 2014. "Measuring Information Technology Spillovers," Information Systems Research, INFORMS, vol. 25(1), pages 53-71, March.
    4. Schilirò, Daniele, 2005. "Economia della conoscenza,istituzioni e sviluppo economico [Knowledge-based economy, institutions and economic development]," MPRA Paper 31492, University Library of Munich, Germany.
    5. Swanson Eric T, 2006. "The Relative Price and Relative Productivity Channels for Aggregate Fluctuations," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-39, October.
    6. Luca Benati, 2001. "Band-pass filtering, cointegration, and business cycle analysis," Bank of England working papers 142, Bank of England.
    7. Francesco Venturini, 2009. "The long-run impact of ICT," Empirical Economics, Springer, vol. 37(3), pages 497-515, December.
    8. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R., 2015. "The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries," Technology in Society, Elsevier, vol. 42(C), pages 135-149.
    9. Hans Lööf, 2005. "A comparative perspective on innovation and productivity in manufacturing and services," Springer Books, in: Uwe Cantner & Elias Dinopoulos & Robert F. Lanzillotti (ed.), Entrepreneurships, the New Economy and Public Policy, pages 181-202, Springer.
    10. Dirk Czarnitzki & Alfred Spielkamp, 2003. "Business services in Germany: bridges for innovation," The Service Industries Journal, Taylor & Francis Journals, vol. 23(2), pages 1-30, March.
    11. Singh, Nirvikar, 2006. "Services-led industrialization in India: Assessment and lessons," MPRA Paper 1276, University Library of Munich, Germany.
    12. Nakajima, Tomoyuki, 2005. "A business cycle model with variable capacity utilization and demand disturbances," European Economic Review, Elsevier, vol. 49(5), pages 1331-1360, July.
    13. Henry van der Wiel, 2001. "Does ICT boost Dutch productivity growth?," CPB Document 16.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Nikulainen, Tuomo & Pajarinen, Mika, 2013. "Industry restructuring in the ICT sector – What does labor mobility tell us about skill relatedness and knowledge spillovers?," ETLA Working Papers 17, The Research Institute of the Finnish Economy.
    15. Jürgen Bitzer & Erkan Gören, 2016. "Measuring capital services by energy use: an empirical comparative study," Applied Economics, Taylor & Francis Journals, vol. 48(53), pages 5152-5167, November.
    16. Emanuele Forlani, 2010. "Competition in the Service Sector and the Performances of Manufacturing Firms: Does Liberalization Matter?," CESifo Working Paper Series 2942, CESifo.
    17. Giulio Bottazzi & Giovanni Dosi & Nadia Jacoby & Angelo Secchi & Federico Tamagni, 2010. "Corporate performances and market selection: some comparative evidence," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1953-1996, December.
    18. Burnside, Craig, 1996. "Production function regressions, returns to scale, and externalities," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 177-201, April.
    19. Ezra Oberfield, 2013. "Productivity and Misallocation During a Crisis: Evidence from the Chilean Crisis of 1982," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 100-119, January.
    20. Marcello M. Estevão, 2007. "Structural changes and labor productivity slowdown in the Euro Area," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(53), pages 336-367, January.

    More about this item

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:igi:igierp:301. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.igier.unibocconi.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.