意大利走錯路了嗎
 

意大利已被列入歐豬五國，南歐重債經濟推動了這場危機的衍生。此外，已故Berlusconis政府已經清楚地表明了無法妥善解決意大利債務危機，大力促進對國家的政治和經濟制度缺乏國際公信力。
 

近日，蒙蒂先生的（學術和前歐盟專員）政府已承諾投產發電，通過戰略分析，在財政緊縮的同時，應該把重點放在促進經濟增長和年輕人就業前景，恢復意大利經濟上。
 

本文的目的是意大利危機的特點與經濟增長的問題，與低工資國家競爭的影響。
 

研究問題
 

是意大利走錯路了？什么是意大利危機的根源？它是一個債務危機還是生長的危機？不偷稅漏稅和腐敗問題導致什么呢？從低工資國家的競爭中獲得什么？
 

方法論
 

它已被用于對意大利債務，生產力，就業率，出口率近期統計數據支持的結論，并結合來自國際貨幣基金組織和意大利銀行的觀察員的經典貿易理論，新貿易理論等靈感。
 

Is Italy Going The Wrong Way Economics Essay

 

Italy has been included in the PIIGS yet, the Southern-European heavily-indebted economies perceived as having been the impetus for the crisis. Moreover, the late Berlusconis government has clearly shown its ineptness in solving the Italian debt crisis properly, strongly contributing to the lack of international credibility towards the country’s political and economic system.

 

Recently, Mr Monti’s (an academic and ex-EU commissioner) administration has been put into power with the promise to restore the Italian economy through a strategy that is supposed to focus on austerity while boosting growth and job prospect especially for young people.

 

The purpose of this paper is to investigate on the characteristics of the Italian crisis relating it to the problem of growth and the impact of the competition with low-wage countries.

 

RESEARCH QUESTION

 

Is Italy going the wrong way? What are the roots of the Italian crisis? Is it a debt crisis or a growth crisis? In which size do the problems of tax evasion and corruption contribute to it? In which size the competition from low-wage countries?

 

METHODOLOGY

 

It have been used recent statistics about the Italian debt, productivity, employment rate, export rate to support the conclusions, combined to Classic Trade theories, New Trade Theories and other inspirations took from the IMF and Banca d’Italia observers.

 

DEBT

 

As some recent studies show (M. Mazzucato, 2011) there is a frequent misunderstanding about the Italian debt. Here we propose some figures of the Italian debt:#p#分頁標題#e#

 

External debt (the part of the total debt which is owned by actors outside the country) in Italy has decreased to 670365 EUR Million in the second quarter of 2012 from 677325 EUR Million in the first quarter of 2012 as documented by Banca d’ Italia.

 

Historically, from 2002 until 2012, Italy External Debt averaged 706092.7 EUR Million reaching the highest peak of 838388.0 EUR Million in March of 2010 and a record low of 524899.0 EUR Million in December of 2002.

 

Let’s see from which countries the gross foreign debt is owned (in 2011)

 

Notes: only the Bank debt is shown. Only the biggest creditors are shown. The data have been provided by IMF studies and updated to 2011.

 

The arrows point to the creditors and are proportional to the amount of the foreign debt owned by the country.

 

France is the biggest creditor of the Italian foreign debt. The external debt is accounted as 163 per cent of the country’s GDP and the government’s debt as the 121 per cent of GDP.

 

Overall, the situation of the Italian debt is not so critical but the main fear of the creditors is that Italy’s debt will grow quickly than the country’s capacity to repay it. The lack of credibility of the Italian former leadership has strengthened the markets doubts on the capacity of Italy to fix her debt situation.

 

 

According to IMF the General government net debt in Italy was reported at 1721.65 EUR billions in 2009, and is expected to be 2224.12 EUR billions in 2015.

 

Household saving rates for Italy

 

Data from OECD (updated 2012). The countries reported from left to right are: France, Switzerland, Spain, Germany, Portugal, UK, Italy, US, Canada, Japan.

 

The Italians have the 4,5 per cent of household income of Household saving rates, occupying the seventh position in the chart (that includes the biggest countries in Europe plus US Canada and Japan, with a focus on PIIGS countries). Even if the domestic rate of saving is destined to experience a decrease in late 2012, the Italian rate is still high especially compared to the non-European countries considered.#p#分頁標題#e#

 

The Italians’ debt generally consists in small mortgages to buy houses. Thus, the main part of the debt is domestic. Being risk-adverse the Italians use to invest in State bonds so the most part of their debt is mainly owned by Italian citizens.

 

Conclusions

 

The amount of the external debt of Italy has generated the “too big to bail out” syndrome but contrary to the vision of the strongest economies in the EU Italy is overall quite solvent, it owns the most part of her debt. Thus the markets and the Italian leadership’s credibility play a major role in the perception of the size of the Italian debt.

 

TAX EVASION AND CORRUPTION

 

It has been proved that if the Italian corruption were its own country it would be the 76th largest economy in the world.

 

Size of European shadow economies 2011 (percentage of national GDP)

 

As we can see from the graph the Italian shadow economy accounts the 21 per cent of the national GDP. In numbers it equals a loss of 60billion Euros for the government finances every year. The size of the country’s shadow economy is larger than the whole GDP of Croatia, the 67th economy in the world.

 

As a consequence, this phenomenon (similarly diffused in most of the Mediterranean economies like Spain Portugal and Greece) drives the taxes up for the corporations and individuals that pay their fair share, damaging competition and the creation of new jobs. Hence corruption and tax evasion can be seen (A. Faiola, the Washington Post) as one of the major reasons for the Italian’s negative growth (see below).

 

LOW WAGE COUNTRIES COMPETITION

 

The biggest challenge for the Italian economy is the one we want to focus on: the low-wage countries competition. We will firstly examine some data on Europe and specifically Mediterranean Europe.

 

In the recent decades the integration of low-wage countries in the international trade system has represented one of the major sources of changing in the world trade system. Basically this inclusion implies a massive increase in the amount of workers producing for the international market and it has generated far reaching consequences on the markets. China’s export has grown from 3 per cent in 1995 to 9 per cent in 2008 (United Nations, 2008).

 

A large amount of literature has investigated on this theme. May this growth in exports represent a big threat to the Western Economies (specifically on the ones of the European periphery)? The threat is generally referred to the level of wages and employment in those countries.

 

Firstly we want to observe how the European specialization framework reacts to the shock, focusing on machinery and textile sectors.#p#分頁標題#e#

 

A remarkable element of the analysis is that the Mediterranean countries are usually specialized in the economic sectors that suffer the more the low-wages products competition: machinery and textile. Actually, machinery (capital intensive) and textile (labour intensive) sectors represent the China’s largest export sector. Moreover, China fares not so well in Service sectors and Transport.

 

The EU import from China has grown from 20 (textiles) and 10 (machinery) per cent in 1999 to 80 and 35 per cent in 2009.

 

From the graphic below we can see the specialization of the main European countries relative to the previously considered sectors.

 

 

As we can note, the pattern of specialization has not changed substantially as a consequence of the Chinese competition. Portugal Italy and Greece result relatively specialized in Textiles mainly because of the low price of this kind of production.

 

Germany Austria and Italy fare well in the Machinery capital intensive sectors that need a strong specialization pattern to perform well.

 

Another factor that shapes the export pattern apart from competitiveness is the existence of trade barriers. Another graph:

 

A dark green colour indicates that the country has low barriers to export. The ordering of colours is dark green, yellow green, yellow, orange and red.

 

We can see that the Mediterranean countries have generally a propensity towards high barriers and this clearly affects the size of their exports.

 

But how does integration of the new low-wage countries in the world market affect specialization in the EU?

 

As the Classical theory suggests that the elimination of obstacles to trade leads to greater divergence in the productive structures and the deepening of comparative advantages, the new trade theory states that integration encourages the use of economies of scale and is likely to reduce cross-country sectorial specialization. Is the prevision true in the case of Europe? As we can state from the graph on EU specializations, there is little evidence of convergence in the EU pattern. As we know from the Ricardian theory a lack of convergence in specialization patterns may expose Europe to asymmetrical competition. The proposed conclusion is that Europe may need a more coherent and closed financial union to face the low-wage countries competition in the proper way. (Uffe Mikkelsen and Esther Pérez Ruiz)#p#分頁標題#e#

 

To deal with the Italian problem: as we can see from Figure 3 the Italian specialization in low-technology manufacturing sectors (like textiles) makes it particularly exposed to the competition from low-wage countries.

 

Some data about the Italian production: the whole manufacturing production (textile, apparel, leather, shoes etc.) accounts 24, 7 milliards of Euros which is double the production of the Italian car sector (in decline).

 

The export from the textile sector accounts 14264 milliards of Euros to the EU countries and 10286 milliards of Euros to the non-EU countries. (ISTAT, 2011).

 

The import of textiles from China accounts only 4, 26 milliards of Euros.

 

The second “made in Italy” sector is the furniture production, this sector is experiencing a loss of 22 per cent since 2007. We have to notice an extraordinary boost of the sector thanks to the increase of Export mainly to France (8,5 per cent), US (8 per cent), Germany (7,3 per cent) in 2010 which is helping the sector to rise again. The reason of this boost can be found in the improved technology.

 

The ceramic sector that used to be the leading sector of the Italian manufacture before the crisis is now experiencing big losses. This is primarily due to the competition of China (and its low production costs) while the sector is also facing with the huge costs of energy provision. Since 2011 the sector is trying to overcome the crisis relying on tariffs (up to 23 per cent) on Chinese import and boosting the Export sector. In 2011 the Italian ceramic exportation has experienced an increase of the 3,5 per cent compared to 2010. The 90 per cent of the sector production is from Emilia Romagna region, the 80 per cent is actually produced in the famous district of Sassuolo.

 

Regarding the machinery sector, the car production actually accounts only the 5 per cent of the whole sector production. The main gains of the sector are in the production of electrodomestics, planes and in the naval industry, accounting the 7 per cent of the country’s economy and the 50 per cent of the country’s total Exportations. This sector has experienced a breakdown in 2009 with a 27 per cent decrease of productivity and now is trying to increase its productivity. Anyway the previsions of growth of the sector are not rosy due to the competition of the high tech China and Korea.

 

The general impression is that the once leading sectors of the Italian manufacture are trying to find a way out of the domestic crisis relying on the Export sectors. In order to achieve this objective they need to solve the major problem of energy provision and give incentive to growth through innovation. Another way out could be the evaluation of the “made in Italy” that relies on the high potential of the Italian design (referring especially to the manufacturing-ceramic-textile-apparel sector). This measure might not be effective enough in the fields of ceramic production considering the recent increase in the quality of Chinese products.#p#分頁標題#e#

 

The recent studies (Banca d’Italia) on the impact of the access of low-wage countries to the world trade market on the Italian economy focus on the changings in the output of firms and the dynamics of employment.

 

To this purpose it is important to distinguish between the effects on employment in the upstream sectors and the downstream ones and productivity and competitiveness of the vertically differentiated and the horizontally differentiated products of Italy.

 

The quantitative approach of Banca d’ Italia (Stefano Federico, 2012) shows that there is a big divide between the consequences of low-wage countries’ products competition among vertically and horizontally differentiated products based on the quality ladder theory.

 

The quality ladder hypothesis suggests that the effect of low-wage competition is smaller in sectors with a greater scope for vertical differentiation. In this case firms in advanced countries should be able to increase the quality of their products in order to protect themselves from foreign competition. Evidence is provided (by Banca d’Italia) looking at the relation between low-wage import penetration and Italy's export unit values, relative to low-wage countries' unit values. This is in order to examine whether the sectors more exposed to competition have been able to start a process of quality upgrading. According to the theory Italy's export unit values relative to low-wage countries' unit values should increase in sectors that are more exposed to competition from low-wage countries and this increase should be concentrated in sectors with a long quality ladder. The evidence provided by Banca d’Italia confirms the prevision and show that there is a positive correlation between innovation and competition with low-wage countries’ products. In other words, the sectors that compete with low-wage products tend to innovate more as a survival strategy.

 

Another way to gain from the low-wage countries integration in the world market is suggested by a tendency revealed using the Heckscher-Ohlin model and sector reallocation. As The removal of the barriers to trade towards new economies and the increase in output of the new countries (low-wage countries) has caused the decrease in price of labour intensive goods and as a chain effect the decrease in the price of labour related to capital, this should be reflected in labour abundant countries in the expansion of the labour intensive sectors while in the capital abundant countries it will cause the reallocation of output and employment towards capital intensive and high skilled sectors.

 

The prevision is that, gradually, the capital abundant countries will cease producing labour abundant goods and shift to capital abundant production.

 

Considering the characteristic and size of the Italian specialization in manufacturing sector it is not totally clear whether this could be the proper answer to the low-wage economies’ competition.#p#分頁標題#e#

 

We also want to observe the impact of the access of new economies on employment.

 

Overall it has been empirically verified that a standard increase in low-wages import corresponds to a 4 percent employment (domestic) decrease in the given sector (Banca d’Italia). It means that there is a negative relationship between the low-wage products’ penetration and changes in employment.

 

Another matter finding is that the decrease in employment is smaller in skill- R&D- capital intensive sectors, which leads again to innovation as a strategy to survive to the new economies’ competition.

 

AUSTERITY and THE PROBLEM OF GROWTH

 

We want now to focus on what many observers consider the genuine root of the Italian productivity crisis: growth.

 

As stated by Banca d’Italia (2012, Bronwyn H. Hall, Francesca Lotti and Jacques Mairesse) both Research and Development (R&D) and Information and Communication Technology (ICT) investment have been identified as areas of relative underperformance in Europe. The ICT sector is smaller in Europe (compared to the Us) but it is also true that less investment in ITC is taking place relatively to GDP.

 

As shown from the Figure 5 the laggards in ICT as a share of investment are Austria, Italy, Portugal and Spain. Regarding R&D investment the situation is similar.

 

R&D and ICT both contribute to innovation, even if to a different extent. R&D seems to be the most relevant input for innovation, but if we keep in mind that 34 per cent of the firms in our sample invest in R&D while 68 per cent have investment in ICT, the role of technological change addressed to ICT should not be underestimated. Importantly, ICT and R&D contribute to productivity both directly and indirectly through the innovation equation, but they are neither complements nor substitutes.

 

However, individually they each appear to have large impacts on productivity, suggesting the underinvestment in these activities by Italian firms.

 

As the R&D and ITC investment has been addressed as unforgettable factors of growth we can easily argue that productivity is dramatically affected by investments in R&D and new capital formation. In fact, the best measure of productivity, something known as "multi-factor productivity" or "total factor productivity," takes into account the effects of new technology and equipment on the performance of workers. This gives additional evidence for the Italian handicap in growth.

 

CONCLUSIONS

 

Italy is definitely going the wrong way.

 

Taking into account the size of the Italian domestic and foreign debt, the losses due to a huge Shadow economy, corruption and tax evasion, the main problem of Italy remains growth.

 

In the last 4 years cuts from 9per cent to 20 per cent of the national research founding are the result of the austerity policies. Hence the lack in investments in R&D and innovation are dramatically reducing the Italian growth potential. The intellectual potential of this country has been recently rated by Thomson Reuters as the 8th in terms of quality worldwide (Global Research Report). Therefore a massive shift in policies is needed in order to valorise the potential of Italy and to boost its economic growth.