Italy's Decline: Getting the Facts Right: Comment

Builing on my discussion of the paper by Daveri - Jona Lasinio (2005) on Italy's economic decline, I first enlarge the perspective of their key findings by considering developments in the US and the European economy. Moreover, I take a different perspective that hinges on the literature on productivity and business cycle, providing theoretical and empirical arguments that lend support to alternative views. This pertains especially to the role of reallocation effects in aggregate productivity and the link between market liberalization and productivity dynamics.