Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278559 
Year of Publication: 
2023
Series/Report no.: 
wiiw Research Report No. 470
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
This paper analyses how Italy's decades-long decline turned the country into the euro area's Achilles heel, the most vulnerable spot in the common currency. We use a structuralist framework to synthesise different (competing) supply-side and demand-side explanations, accounting for long-term processes and sectoral interdependencies. We argue that structural domestic factors that were already present in the decades after World War II ('original sins') - low-cost competition and labour fragmentation, many small firms linked to low innovation, and a deep territorial divide - interacted with the policy constraints brought about by globalisation and European integration to exacerbate Italy's decline vis-à-vis its euro area peers.
Subjects: 
Italy
decline
euro area
crisis
JEL: 
E65
P16
F45
F62
Document Type: 
Research Report

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