The failure to grow in the Italian economy has been known for a long time: it begins as a decline in total productivity, which later becomes a decline in per capita income, accompanied in recent years by a serious loss of potential output. It is no longer just a recession in demand, which will sooner or later be corrected by a recovery.
Instead, it is a real contraction, at the same time, of supply and demand: the more precise definition is therefore not that of depression, but rather that of deindustrialization. And the necessary remedy is not cyclical: replace the past fiscal "austerity" with a little deficit spending (only ours or better yet European!). Instead, a strategy as well explained by the modern theory of growth would be needed, in favor of innovation, of the accumulation of new capital (there is far too much of the “old” one); and therefore of the growth in expected demand, necessary to support this.
A growth strategy based on two fundamental steps:
. Making the country "attractive" for investments again, ours and others. This requires special attention to the quality (and costs) of services, starting with public ones – which define the quality of a territory, and make it hospitable for new productive initiatives. Without that, not only do we fail to attract new investment, but our best companies are driven to grow only elsewhere.
. A financial structure suitable for this new task to which our banking system appears less and less adequateor, in turn engaged (as in other European countries) in a delicate deleveraging process which will be more radical and protracted over time than appears from recent data on "credit rationing" (this too usually attributable to a economic-type analysis, as is obvious in the cyclical alternation of recession and recovery). From this diagnosis – an explicit and well-defined strategy is needed for the country to return to growth; and this requires an adequate financial structure – the analyzes and proposals contained in it move in this notebook.
Attachments: Ref Ricerche notebook
