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Two Mezzogiornos

  • Hans-Werner Sinn
  • Frank Westermann

The analogy between the economic problems of the Mezzogiorno region and East Germany has been initially contested by many authors. This paper argues that there are striking similarities in the two regions, in terms of the causes of their economic predicament. With an aggregate labour productivity of 55% relative to the rest of the country, both are true transfer economies, whose consumption exceeds production by far. Beyond locational disadvantages, the present paper identifies overdrawn wages, high social security spending and the Dutch disease problem as core reasons for the poor economic performance and discusses possible cures.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8125.

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Date of creation: Feb 2001
Date of revision:
Publication status: published as Sinn, Hans-Werner and Frank Westermann. "Due 'Mezzogiorni'." L'Industria, Nuova Serie 27, 1 (January-MArch 2006): 49-51.
Handle: RePEc:nbr:nberwo:8125
Note: PE
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  1. Sinn, Hans-Werner, 2002. "Germany's Economic Unification: An Assessment after Ten Years," Review of International Economics, Wiley Blackwell, vol. 10(1), pages 113-28, February.
  2. Boltho, Andrea & Carlin, Wendy & Scaramozzino, Pasquale, 1997. "Will East Germany Become a New Mezzogiorno?," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 241-264, June.
  3. Taylor, Jim & Bradley, Steve, 1997. "Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and the UK," Kyklos, Wiley Blackwell, vol. 50(2), pages 221-45.
  4. Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
  5. Sinn, Hans-Werner, 1996. "International Implications of German Unification," CEPR Discussion Papers 1508, C.E.P.R. Discussion Papers.
  6. Faini, R. & Galli, G. & Giannini, C., 1992. "Finance and Development : the Case of Southern Italy," Papers 170, Banca Italia - Servizio di Studi.
  7. Michele Boldrin & Fabio Canova, 2001. "Inequality and convergence in Europe's regions: reconsidering European regional policies," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 205-253, 04.
  8. Bernard, A.B. & Durlauf, S.N., 1993. "Convergence in International Output," Working papers 93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Stephan Danninger & Alberto Alesina & Massimo V. Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," IMF Working Papers 99/177, International Monetary Fund.
  10. van Wijnbergen, Sweder, 1984. "Inflation, Employment, and the Dutch Disease in Oil-Exporting Countries: A Short-Run Disequilibrium Analysis," The Quarterly Journal of Economics, MIT Press, vol. 99(2), pages 233-50, May.
  11. Bruno, Michael & Sachs, Jeffrey, 1982. "Energy and Resource Allocation: A Dynamic Model of the "Dutch Disease"," Review of Economic Studies, Wiley Blackwell, vol. 49(5), pages 845-59, Special I.
  12. van Wijnbergen, Sweder J G, 1984. "The 'Dutch Disease': A Disease after All?," Economic Journal, Royal Economic Society, vol. 94(373), pages 41-55, March.
  13. Cheung, Yin-Wong & Lai, Kon S, 1995. "Lag Order and Critical Values of the Augmented Dickey-Fuller Test," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(3), pages 277-80, July.
  14. Faini, Riccardo & Galli, Giampaolo & Gennari, Pietro & Rossi, Fulvio, 1997. "An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions," European Economic Review, Elsevier, vol. 41(3-5), pages 571-579, April.
  15. Wolfgang Nierhaus, 1999. "Höhere Rentenanpassung in Ostdeutschland erforderlich ?," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 6(04), pages 45-51, October.
  16. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
  17. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
  18. Michael Bruno & Jeffrey Sachs, 1982. "Energy and Resource Allocation: A Dynamic Model of the "Dutch Disease"," NBER Working Papers 0852, National Bureau of Economic Research, Inc.
  19. Eswar Prasad & Francesca Utili, 1998. "The Italian Labor Market: Stylized Facts, Institutions, and Directions for Reform," IMF Working Papers 98/42, International Monetary Fund.
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