What’s wrong with Italy?

October 18, 2012

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.

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2 Responses to “What’s wrong with Italy?”


  1. […] 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 […]


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