The Evolution of the World Trade and the Italian ‘Anomaly’: A New Look

Michele Di Maio and Federico Tamagni

No 227, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: This work provides an empirical assessment of the ’sophistication’ of the Italian international specialization pattern and of its evolution during the period 1980−2000. In particular we discuss the Italian ’anomaly’, i.e. the evidence that Italy displays a specialization pattern more similar to the one of emerging economies than to the one of countries of comparable level of per-capita income. We show that combining the information coming from a new index measuring the income/productivity content of traded goods, i.e. the PRODY index recently proposed in Hausmann et al. (2005), with the index of Revealed Comparative Advantages (RCA) can shed light on the Italian anomaly. We begin providing a detailed picture of the theoretical and empirical characteristics of the PRODY index. In particular we calculate the index for 1980, 1990 and 2000 mapping its dynamics through that period. Then we describe the characteristic and evolution of the Italian RCA using both parametric and non parametric techniques finding that the Italian pattern of specialization is particularly persistent. Finally, we describe the co-evolution of the PRODY and of the RCA indexes. Our analysis shows that in the last two decades, the world trade has been rapidly changing with Italy becoming increasingly more competitive and specialized in products that are characterized by decreasing income/productivity levels. Thus, while the Italian ’anomaly’ was not a problem in the past, it may have become an obstacle to future growth.

Keywords: Specialization pattern; RCA; PRODY index; Italian ’anomaly’ (search for similar items in EconPapers)
JEL-codes: C14 F14 (search for similar items in EconPapers)
Pages: 26
Date: 2007-02-26
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Evolution of World Export Sophistication and the Italian Trade Anomaly (2008)
Working Paper: The evolution of world trade and the Italian ‘anomaly': a new look (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:227

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