According to Cristiano Antonelli and Federico Barbiellini Amidie (2011), the economic growth of Italy in the second part of the 20th century provides systematic and large evidence about fast rates of growth of output, particularly total factor productivity. However, Italy has not made any effort to formalize a generation of technological knowledge as indicated by traditional indicators such as increased expenses in research and development patents.
Gross Domestic Product
In 2016, the gross domestic product of Italy was valued at $1.85 trillion. The value is a huge decrease because the country had been enjoying high values in past years. For instance, the value amounted to $2.164 in 2011, which was a significant increase of 0.4% compared to the figure in 2010. Basing on the gross domestic product, Italy is ranked fourth after Germany, the UK, and France (Geological Survey, 2013). In fact, the industrial sector of Italy accounted for approximately 24.7% of the gross domestic product in 2010. The industrial sector is heavily reliant on imported non-fuel and fuel mineral inputs.
Italy has significant mineral resources such as clay, science marbles and Carrara. Back in 2011, the country was named as number 14 regarding the highest manufacturers of cement in the world. As well, just like France, the UK, Germany, and other heavily industrialized nations, Italy has a services-based economy. For the last half a century, the share of the gross domestic product in the Italian market has been 30% while that of services has been 51.9%. In general, the service industry accounts for just 24.2% of the gross domestic product of Italy while other services such as US Central Intelligence Agency accounts for 73.4%.
GDP per capita
Michael Dunford and Lidia Greco (2011) maintain that is one of the main high-income members of the EU. For instance, the economy of Italy has a gross domestic product per capita of more than 300% of the global average and slightly above the EU15 average as assessed at Purchasing Power Standards (PPS). Italy gets its rating at the southern part of one the biggest industries in the world when grouped alongside high-income European free trade association nations and demographically small countries. For example, the 330 million Italian inhabitants form 5% of the world population and just above 17% of the world gross domestic product.
Regarding employment, Italy has gone through evolutionary instead of revolutionary change. Substantial changes have been recorded in the employment sector, especially in the service sector because of many women in the workforce. The increase in unemployment rates in Italy are because of the economic recession that is marked with a tendency for young people to keep studying well past the minimum school-leaving age. The increase in employment rates in Italy is also associated with a corresponding increase in continuing and vocational training.
Compared to other countries across the globe, both Italy and Britain have the same feature of volatile fluctuations in unemployment at regional and national levels. For instance, Britain is going through a rise in the average level of unemployment and fast depreciation of the nominal rate. At the end of the 20th century, Italy went through a dramatic in unemployment as well as a real depreciation in its exchange rate after the breakdown with the first ever OPEC and the Bretton Woods system. The comparison shows that just like other countries in the world, Italy is experiencing an increasing rate of unemployment because of population increase, corruption, and many people who decide to go for further learning to secure well-paying jobs.
Living Standard Issues
Basing on GDP as the yardstick of the living standard, Italy has poorly utilized the unprecedented movements of both capital and labor costs across national frontiers of the last century globalization. The poor exploitation of unprecedented movements has made Italy fail to converge with the leading countries. Nonetheless, based on non-monetary welfare systems, the conclusion can be reversed. For instance, Italy has successfully caught up with the leading countries in infant mortality and life expectancy.
The government of Italy repeatedly argued that the living standard of the nation is being kept low by higher military budgets and not its reform records. Also, the large population of Italy continues to stretch resources reducing living standards of Italians. As well, the low standards in Italy are attributed to high disparity levels in income and high levels of unemployment across the country. For example, living conditions of Roma are extremely below acceptable standards because of little consideration for how the Romans consider themselves; they are widely viewed as nomads.
Inflation and Cost of Living
Evidence from Italy confirms consumers are railing against 18% inflation after the introduction of physical euro coins and notes in 2012. Retiring in Italy used to be attractive to citizens from the United States because of the cost of living that was traditionally lower than other leading countries across Europe. Because of the conversion of the Euro, inflation as well as the weakened dollar, the days of retiring in Italy are over. At the moment, the cost of living in Italy and United States is the same as the cost of living in Italian cities such as Milan, Rome, and Florence. To be particular, the cost of living in such cities is far less than living in hill towns and rural areas across Italy.
Trade and Current Account Performance
Italy is experiencing a rising public debt that has resulted in various credit rating organizations to lower the sovereign debt review of the country. The closest trade ties that the country has are with other members of the EU, with whom Italy carries out approximately 54.4% of its overall trade. The largest trade partners of Italy from the European Union are Germany, France, and the UK basing on the order of the market share. The country continues to tussle with the effects of globalization, and some nations such as the Chinese nation have negatively crumbled the lower-end industrial product industry of Italy.
The economy of Italy is hugely influenced by an extensive underground economy that is equivalent to about 27 percent of the gross domestic product of Italy. The production is not, in any way, subject to taxation, thus stands an origin of lost revenue to both the central and local government. The Italian nation has good economic and trade relations with various countries outside Europe such as the United States. For instance, Italy and the US work closely on several major economic including within the G-8. Back in 2005, Italy was ranked as the eleventh biggest trading partner of the United States because of its large population.
In conclusion, at the moment, Italy is one of the greatest industrial countries in the world. Despite the aggregate gross domestic product of Italy being among the largest in the world, the country has a lower position in the international league table concerning per capita output. The low per capita output is associated with high scores of various small economies. Also, the general economic development of Italy has been characterized by several marked disparities in various regions such as the south and center-North. The large and ever-increasing population is also hampering the general economic development of the country because the available scarce resources are needed for both economic development and catering for the unlimited human wants.
Antonelli, C & Amidei, F, B. (2011). The Dynamics of Knowledge Externalities: Localized Technological Change in Italy, 195-1992. Cheltenham: Edward Edgar Publishing.
Dunford, M & Greco, L. (2011). After the Three Italies: Wealth, Inequality and Industrial Change. New York: John Wiley & Sons.
Geological Survey. (2013). Minerals Yearbook - Area Reports: International Review: 2011, Europe and Central Eurasia. New York: Government Printing Office.
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