The Italian investment problem revisited

Abstract

The paper provides a new contribution to the controversy over the Italian investment policy. Reviewing briefly the main bottlenecks to full investment and employment and possible remedies in the case of Italy, the author is led to conclude that “a very vast and immediate expansion in Italian production is not to be expected or hoped for. However, a determined effort to increase production is required just the same. For while there may not be a wide margin of unemployed natural or industrial resources in Italy, there is a great deal of maldistribution in investment and in the employment of productive resources. Consequently, even disregarding the implications of a bolder policy concerning the balance of payments situation, there is room in Italy for a considerable, if not immediate, increase in production, through the elimination of certain bottlenecks related chiefly to the income and tax structure, as well as to imperfect information, and through the increases in productivity resulting from a better adjustment of the current investment structure”. 

JEL: E22, E23, E24, F32