Italy: Can Reforms Lift Growth Prospects?

Italy: Can Reforms Lift Growth Prospects?

Key takeaway – The Italian economy is large, relatively diversified and sturdy. Historically, growth has been driven by external factors (e.g.: the “economic miracle” after World War II) or political efforts (e.g.: competitive devaluations and fiscal spending between the 1970s and the 1990s). For decades, innovation and international competitiveness lagged most peers. After joining the […]

Hunt for Alpha Succeeds if the Entrepreneur Attracts the Right Investors

Hunt for Alpha Succeeds if the Entrepreneur Attracts the Right Investors

From a speech given at the Olivetti day: “How to finance innovation and why it needs to be done.” Brescia, Italy, 16 October 2015 Italy is experiencing a period of extraordinary importance for its future. If current developments have positive outcomes, a virtuous circle could be created with the potential to launch a new and much […]

Fiscal Debit Cards and Tax Credit Certificates: The Best Way to Boost Economic Recovery in Italy (and Other Euro Crisis Countries)

A fiscal shock to Italy Recently on this blog, Brunello Rosa had submitted an interesting policy proposal to boost Italy’s GDP. Brunello’s proposal shares many analytical premises with the one we have articulated in a public appeal published at the end of last year,  concerning the issuance of tax credit certificates as a means to […]

Europe’s Great Divide

In our previous post (here), we described post-electoral Europe’s stalemate in a European version of the  “Impossible Triplet” sketched by Dani Rodrik to describe the dilemmas of globalization. We drew a triangle given by the three constitutive dimensions of the EU: “European integration”, “National sovereignty”, “Democratic consensus”. Each one is incompatible with the other two.  […]

Wages, Productivity and Employment in Italy: Tales From a Distorted Labor Market

Italy’s labour market productivity has been stagnating in the past decade despite numerous reforms. This column gives an explanation why this is so. By focusing exclusively on flexibility, past labour market reforms have completely neglected incentives. There is severe allocative malfunctioning in the Italian labour market. Wages do not reflect sector productivity in the short […]

Renzi’s Day

The Chamber of Deputies approved the electoral reform bill that Renzi and Berlusconi had negotiated before Renzi squeezed out Letta to become Prime Minister of Italy. The bill goes to the Senate now. That Renzi got the lower chamber to approve the bill is a minor victory, after all he enjoys a majority. There was some fear […]

Could Mario Draghi Implementing QE at the ECB Possibly Help Matteo Renzi Raise the Italian Deficit?

What a convoluted title! Still, the lack of formal elegance might just be compensated for by its communicative efficacy. The aim of the above header is to link two names in people’s minds, both of them Italian: Mario Draghi and Matteo Renzi. Naturally the idea is not original, the FT’s Peter Spiegel  recently published an […]

Italy: The King is Dead, Long Live the King

Florence Mayor Matteo Renzi has been formally offered the opportunity to see if he can put together a government that can win a vote of confidence>  It is not much of an issue in the Chamber of Deputies, where the PD has a majority, but in the Senate where it does not.  The market, which […]