The Italian economic stagnation in a Kaldorian theoretical perspective

Guglielmo Forges Davanzati (), Rosario Patalano and Guido Traficante
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Guglielmo Forges Davanzati: University of Salento

Economia Politica: Journal of Analytical and Institutional Economics, 2019, vol. 36, issue 3, No 8, 861 pages

Abstract: Abstract This paper analyses the Italian economic stagnation in a Kaldorian framework. On the theoretical ground we propose an interpretation of the Italian economic stagnation based on the continuous reduction of aggregate demand and labour productivity. We also consider the role of the banking sector as a factor driving aggregate demand and, in turn, labour productivity. We estimate a VAR for the period 2002–2015 to analyse jointly the evolution of private consumption, real GDP, private investments, credit supply, labour compensation and productivity. Our main empirical finding is that aggregate demand and credit supply significantly affect the path of labour productivity, consistently with Kaldor–Verdoorn Law.

Keywords: Kaldor; Italy; Aggregate demand; Labour productivity (search for similar items in EconPapers)
JEL-codes: B52 E12 E6 J12 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s40888-017-0084-0

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