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From Rags to Riches back to Rags? The Slow Economic Decline of a Successful Nation: Italy 1950–2013

Author

Listed:
  • Gianluigi Pelloni

    (Rimini Centre for Economic Analysis, Italy; Wilfrid Laurier University, Canada; Johns Hopkins Bologna Centre, Italy)

  • Marco Savioli

    (Rimini Centre for Economic Analysis, Italy; University of Bologna, Italy)

Abstract

In this paper we present the current crisis of the Italian economy as a phase of a major systemic decline. The social political system has led to a framework that has violated the fundamentals of sustained economic growth. An unhealthy implicit contract between the social-political elites and the civil society has imposed a "static" view of comparative advantage. The indispensable sectoral restructuring of the economy has not taken place, leading to stagnation. Defenceless positions have often been hiding the structural problem behind the screen of Italian exceptionalism. We stress that a growth strategy, though it has to be country and context specific, it cannot violate fundamentals. We suggest that Italy must take on again, as quickly as possible, a "dynamic" view of comparative advantage. That would entail a dramatic shift in its economic-political-social structure and it would be necessarily painful at different levels. However, this is the only route Italy could follow to stay on course for sustained economic growth.

Suggested Citation

  • Gianluigi Pelloni & Marco Savioli, 2014. "From Rags to Riches back to Rags? The Slow Economic Decline of a Successful Nation: Italy 1950–2013," Professional Reports 01_14, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimpre:01_14
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    Cited by:

    1. Gianluigi Pelloni & Marco Savioli, 2014. "Why is Italy doing so badly after doing so well?," Professional Reports 02_14, Rimini Centre for Economic Analysis.
    2. Gianluigi Pelloni & Marco Savioli, 2015. "Why Is Italy Doing So Badly?," Economic Affairs, Wiley Blackwell, vol. 35(3), pages 349-365, October.
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    More about this item

    Keywords

    sustained growth; comparative advantage; technological progress; corruption; Italy;
    All these keywords.

    JEL classification:

    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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