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The three errors that block the Italy Sussiadiario March 3

FINANCE / 2. The three errors that block
Italy Giuseppe Pennisi
Thursday, March 3, 2011
Imagoeconomica
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FIAT / I "tricks" Marchionne to take Chrysler and Volkswagen and Alfa Romeo, P. Annoni Under the new procedures for the coordination of economic policies, by April 15 Italy (like the rest of the Eurozone) will simultaneously submit stability programs and reform programs. It is a major breakthrough not only in order to promote consistency between the budget laws and reform across the Eurozone, but also to make sure that economic growth and financial stability are an effective combination.

At the time of writing this note, the stability law was approved (and updated through a decree called "milleproroghe") and the National Reform Plan (NRP) approved by the Council of Ministers of 5 November is under Update from the Ministry of Economy and Finance. Before finalization, the Government and Parliament will have "views and proposals" from the CNEL (National Council for Economy and Labour).

The NRP Nov. 5 outlining the reforms that would bring the rate of increase in GDP from the low shot past fifteen years to 2% per year since 2013. In recent weeks, is conjecturing a "whip" of measures that would bring the rate of growth at 3-4% per year from 2013-2014. An examination of the PNR would be premature: the speed in which data are evolving political events of great economic importance in the Mediterranean Basin, it will be desirable to do so hot (when you know the details) in the daily press. Is worth asking, however, true to what the Italian economy can grow, that which is what economists call the "potential rate of growth" in the light of the allocation of inputs and their productivity (two factors known or at least easily estimated).

In 2009 there was a debate on an estimate of the European Commission's view that this potential rate would be around 1, 3% per year, while more and more of a good third of 1% that has marked the past three decades. The debate was mostly among economists, few politicians intervened (not willingly). He finished in the space of a few weeks, because estimates of the European Central Bank (ECB) and the American National Bureau of Economic Research (NBER), while following different methods between themselves, both with respect to the procedures adopted by the Commission, leading to similar conclusions: that posed the most optimistic potential growth rate at 1, 7% per year. In light of this analysis, even 2% of Pnr last autumn seems ambitious.

What is the main constraint? The aging of the population - in part a result of having neglected for decades, the family policy - has made it less productive than our most important resource, the "human capital". Two-thirds of the country - the dozens of studies documenting - there is little in "social capital", the ability to network all the human capital of individuals and to create a system, it is the result of a secular individualism that emphasizes the poorly understood ' opportunism with respect to cooperation.