Growth of the Italian Economy

As can be seen from this graph, Italian gross domesticated product per capita grew at more than double the mistreat post WWII that it did pre WWI.

The protracted flowing of growth that Italy has undergone since its precipitous line during WWII has resulted in an average standard of brio of roughly $16,500 (in 1990 U.S. Dollars); or roughly five times the average standard of living in Italy just before the Great economic crisis. In fact, this dimension is among the best in all of Europe. The ratio of pre Great Depression standard of living to post WWII standard of living for Germany is 4.5, for France it is 3.5, and for Britain the coefficient of propagation is roughly 3 (Delong).

As we have seen, the post WWII period in Italy can be characterized as one of soaked and rapid economic expansion, as measured by GDP per capita. However, this rosy picture does not fully capture the domestic economic situation in the country. The real story of the Italian economy post WWII has been one of struggle between the general and undercover celestial sphere. Indeed, it is not far-fetched to claim that the private sector has lone(prenominal) truly begun to exert its power in Italy since the country entered the European Union. The rest of this paper will focus on the birth between the primeval government and the private sector, showing that until relatively recently the populace sector held the upper ha

The private sector continues to suffer from an overly large-mouthed public sector in Italy to this day. This can be all the way seen in the relationship between Northern Italy and southern Italy. approximately half of the overall recompense paid in grey Italy can be viewed as redistributive, or higher than they should be in comparison to national benchmarks of productivity and reinforcement. This creates a run out on the Italian economy because of two factors. The first is that the public bureaucracy in the Southern Italy is a good deal larger, in relation to the population, than that in Northern Italy. The second is that public sector wages in Italy atomic number 18 relatively stable nationwide, while prices are much higher in Northern Italy than in Southern Italy.

This style that real public wages are much higher in the South than in the North. This also means that there is far less incentive to enter the private sector in Southern Italy than in Northern Italy. Thus, the central government to this day continues to depress the growth of the private sector in Southern Italy by in effect subsidizing the wages of public sector employees in that region. This creates a vicious wad in which private sector jobs are not sought-after(a) after in Southern Italy, and private entrepreneurs have a hard time attracting talented employees in the region (Alesina, pp.17-24).

McConnel, Cambell, Brue, Stanley; Microeconomics: Principles, Problems, and Policies, raw(a) York, NY, McGraw-Hill Irwin, 2002.

Due to the reforms the country has implemented and its membership in the European Monetary Union, the overall outlook for the Italian economy as well as for the private sector has meliorate importantly in recent years. Historically low interest rate and the depreciation of the Euro has led to a surge in merchandise demand which has allowed Italian companies to further their expansion into new markets. Additionally, Italy has adopt that strict budgetary policy that has permitted fiscal consolidation and improved debt manage
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