Italy is one of the problem countries of Europe, but it’s different from the others. Unlike Greece, the government deficit is small. If we exclude interest payments there’s a surplus. Unlike Ireland and Spain, the banks are fine. So what’s the problem?
Gian Luca Clementi has the answer in a word: growth. As you can see below, growth — here the 10-year average growth rate of GDP per person — has fallen steadily since 1960 and is now essentially zero. Your assignment: explain why. I’ll try to get Gian Luca to send us his answer.
Update (Oct 18): Stan Zin sends this picture of productivity, which has the same profile.
October 18, 2012 at 2:00 pm
http://www.washingtonpost.com/blogs/worldviews/wp/2012/10/18/if-italian-corruption-were-its-own-country-it-would-be-the-worlds-76th-largest-economy/?print=1
what problem?
October 28, 2012 at 6:25 pm
[...] serial killers – and good entertainment it is. But it’s also one of the reasons the Italian economy isn’t more productive. It’s no wonder that Italy ranks 73rd (of 185 countries) in the [...]