Macroeconomic Estimates of Italy's Mark-Ups in the Long-Run, 1861-2012

33 Pages Posted: 5 Dec 2017

Date Written: February 23, 2017

Abstract

We explore three alternative methodologies drawn from economic history literature to compute macroeconomic total-economy estimates of Italy’s mark-ups since 1861, based on the new historical national accounts presented in Baffigi (2013) and Giordano and Zollino (2015). Two key features of Italy’s history stand out: a) the increase in market power under the Fascist regime and b) the strengthening of competition since 1993. We then focus on a more limited time span (1970-2012) in order to estimate sectorial mark-ups using the model developed in Bassanetti, Torrini and Zollino (2010). Employing Istat and EU-KLEMs data, we find evidence of a reduction in mark-ups after the completion of the Single Market, with an acceleration after the inception of the European Monetary Union, owing mostly to the decrease in workers’ bargaining power rather than in firms’ margins. Moreover, we find large heterogeneity in mark-ups across sectors, with regulated services displaying weaker competition than manufacturing and market services.

Keywords: mark-ups, completion policy, wage bargaining, growth accounting

JEL Classification: E01, J50, L50

Suggested Citation

Giordano, Claire and Zollino, Francesco, Macroeconomic Estimates of Italy's Mark-Ups in the Long-Run, 1861-2012 (February 23, 2017). Bank of Italy Economic History Working Paper No. 39. Available at SSRN: https://ssrn.com/abstract=3082183 or http://dx.doi.org/10.2139/ssrn.3082183

Claire Giordano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Francesco Zollino (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
14
Abstract Views
160
PlumX Metrics