The Golden Age and the Second Globalization in Italy

57 Pages Posted: 25 Mar 2013

Date Written: October 25, 2011


After the Golden Age, Italy experienced increasing difficulties in adjusting its economy to the changing external context and to the requirements for sustaining catch-up growth at a higher level of economic development. The adjustment issue is common to advanced countries but the difficulties experienced in Italy look particularly severe. Cushioned by inflation and devaluation, growth remained relatively high in the 1970s. In the subsequent decade, in spite of improved conditions for addressing macroeconomic disequilibria structural adjustments were neglected. Major supply side reforms were eventually implemented in the aftermath of the 1992 crisis. Nevertheless, in the second half of the decade growth fell below the EU average. These necessary reforms fell however short of what was required. Participation in EMU did not help as far as the improvement of growth prospects was concerned. In the last section some of the economic and metaeconomic factors explaining the ineffectiveness of the reform process are briefly explored.

Keywords: Italy, Europe, postwar economic growth and policy

JEL Classification: N14, O52

Suggested Citation

Crafts, Nicholas and Magnani, Marco, The Golden Age and the Second Globalization in Italy (October 25, 2011). Bank of Italy Economic History Working Paper No. 17, Available at SSRN: or

Nicholas Crafts

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Marco Magnani (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184

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