Capital Inflows, Current Accounts and the Investment Cycle in Italy: 1861–1913

Barbara Pistoresi and Alberto Rinaldi

A chapter in Research in Economic History, 2015, vol. 31, pp 241-261 from Emerald Group Publishing Limited

Abstract: Relying on a new dataset, this paper examines the genesis of current account fluctuations and the investment cycle in Italy. We perform a Granger causality test that shows that the persistent current account deficits in the years from unification to World War I were generated by variations in capital inflows, as hypothesized by Fenoaltea, and not by the dynamics of GDP, as in the Bonelli–Cafagna model. Finally, we show that these capital inflows prompted an industrial investment cycle in equipment and machinery but not – as claimed by Fenoaltea (1988) – a general investment cycle which included also construction and more volatile components of investment. These patterns held under both fixed and floating exchange rate regimes.

Keywords: Capital imports; current accounts; investment cycle; Italy; Granger causality; F43; O11; N1; N7 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... 3-326820150000031005
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
Working Paper: Capital Inflows, Current Accounts and Investment Cycle in Italy: 1861-1913 (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:rehizz:s0363-326820150000031005

DOI: 10.1108/S0363-326820150000031005

Access Statistics for this chapter

More chapters in Research in Economic History from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().