Just to keep things somewhat organized, I’m breaking this out of today’s roundup. Yglesias, like most normal people with a sound and sober understanding of the dismal science, is totally baffled by Italy’s deeply dismal recent growth.
Not that I blame him. But I think one of his commenters, Halfkidding, hits it on the nose:
Italy has a sprawling unofficial economy, it doesn’t do bubbles especially real estate ones and I strongly suspect it’s household debt burden is comparatively small. And households mean a lot there. In some large measure wealth is held not so much by individuals there but by family. A stupendously stabilizing phenomena. There are many complex cultural reasons why macro economics means less there than perhaps anywhere in the developed world. Throw in that their multi national corporations are highly successful if not in pure profit terms in terms of persistence and stability in large part because of design and a talent for it. Something not possible to even quantify perhaps. It’s embedded in the culture.
At least that’s what the Italians think. Here’s a good piece on this in Italian in which the author starts off by translating ‘double-dip’ as ‘double thump.’ A ‘tonfo’ is a ‘dip,’ economically speaking, but in Italy one does get the sense of playing thwack-a-mole with fiscal and monetary policy more often than not. Is that to be blamed on monetary union? Ask a man on the street and you’ll hear yes: the days of joyously lira devaluation are sadly gone, but according to most economists, that’s a very good thing. But what about growth?