tag:blogger.com,1999:blog-3949752.post114486218115294313..comments2023-04-29T17:39:27.807+02:00Comments on Italian Economy Watch: Italy: Devaluation or DeflationUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3949752.post-27813274724440799642007-01-31T08:59:00.000+01:002007-01-31T08:59:00.000+01:00Hi there,
"An Increase in labor productivity woul...Hi there,<br /><br />"An Increase in labor productivity would increase the competitiveness of the italian economy without the need for devaluation." <br /><br />Of course, the question is given the demographic profile Italy has, and the rising median age of the population, it is far from clear that this will be possible. The human capital stock is also changing negatively as young educated Italians leave to be replaced by lower eductaed immigrants.<br /><br />Don't misunderstand me , I'm not against immigration, au contraire, Italy needs migrants to make up for the missing births, but we need to think about a lot of factors here. Stopping the outward flow of graduates would be a good first move, but you need to be able to create well paid positions before the age of 30 to do this. This means a big change in corporate mentality. Otherwise people just up for the US, Canada, the UK, Australia or whatever, where they can start earning reasonably well from 25/26. The simplistic story on labour market reform does not address this issue.<br /><br />Then you need to think about the demand side, since to get sufficient GDP growth to finance the deficit you need to have internal demand growth, and this is just where the elderly societies - Germany, Japan, and Italy - are experiencing greatest difficulty. So while Germany has gotten the productivity gains you mention, it has also become totally dependent on exports (ditto Japan) and still will have difficulty getting ternd growth of over 1%, and like this Italy undoubtedly goes bust at some point.<br /><br />The consumer demand issue is really the key one, and needs to be grasped in its entirety. Claus Vistesen has a first pass <a href="http://globaleconomydoesmatter.blogspot.com/2007/01/japans-economy-chasing-illusions.html">at Japan here</a>, and at <a href="http://globaleconomydoesmatter.blogspot.com/2007/01/eurozone-structural-assesment.html">Germany and the Eurozone here</a>.<br /><br /><br />Anyway, thanks for passing by and taking the trouble to leave a comment.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-3949752.post-40922389092356669242007-01-31T00:26:00.000+01:002007-01-31T00:26:00.000+01:00An Increase in labor productivity would increase t...An Increase in labor productivity would increase the competitiveness of the italian economy without the need for devaluation. Recent german experiances provide an excellent example of labor market reforms helping an economy--even when bound by the EMU.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3949752.post-1147549681168313492006-05-13T21:48:00.000+02:002006-05-13T21:48:00.000+02:00As Berlusconi is singularly implicated in this eco...As Berlusconi is singularly implicated in this economic debacle, perhaps the incoming Prodi government could start by confiscating the entire value of the "balding one's" media empire and then (politely) request other similarly wealthy individuals who have benefited from some of scams perpetrated by the previous administration to also contribute (albeit on a more optional basis).<BR/><BR/>This fund might help to soften the blow for Italian citizens screwed by Berlusconi and his fellow crooks!Anonymousnoreply@blogger.com