Trends in Italy's Nonprice Competitiveness

36 Pages Posted: 1 Jul 2008

See all articles by Bogdan Lissovolik

Bogdan Lissovolik

International Monetary Fund (IMF) - European Department

Date Written: May 2008

Abstract

Italy's medium-term economic performance has raised "standard" competitiveness concerns as unit labor costs surged, and real export growth fell. But the recent economic upturn, low current account deficit, and robust nominal exports argue for less pessimism. An empirical analysis confirms the standard concerns, but also suggests that "residual" factors, which partly reflect nonprice economic restructuring, have supported Italy's real exports after 2005 (as in Germany but less so in France or Spain). An investigation of selected structural trends over the past decade offers some substantiation to Italy's "restructuring story," including quality upgrading, geographical trade diversification, and outsourcing. But sluggish services, low FDI, and modest "technological" upgrading indicate limits to Italy's restructuring.

Suggested Citation

Lissovolik, Bogdan, Trends in Italy's Nonprice Competitiveness (May 2008). IMF Working Paper No. 08/124, Available at SSRN: https://ssrn.com/abstract=1153745

Bogdan Lissovolik (Contact Author)

International Monetary Fund (IMF) - European Department

700 19th Street NW
Washington, DC 20431
United States

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