The Eurozone's Achilles heel: Reassessing Italy's long decline in the context of European integration and globalization

Dario Guarascio, Philipp Heimberger and Francesco Zezza

No 171, CIMEO Working Paper Series from Centre for Investigation and Modelling of Experimental Observations (CIMEO)

Abstract: This paper analyses how Italy's decades-long decline turned the country into the Eurozone's Achilles heel, the most vulnerable spot of the common currency. The paper develops a structuralist framework that synthesizes competing supply-side and demand-side explanations. It argues that domestic structural factors already present in the decades after World War II, including low-cost competition and labour fragmentation, the prevalence of small firms linked to low innovation, and a deep territorial divide, interacted with policy constraints brought about by globalization and European integration. These interactions exacerbated Italy's decline vis-a-vis its large Eurozone peers.

Keywords: Italy; decline; Eurozone; crisis; globalization; European integration; productivity; structural change (search for similar items in EconPapers)
Date: 2023-05
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Related works:
Journal Article: The Eurozone’s Achilles Heel: Reassessing Italy’s Long Decline in the Context of European Integration and Globalization (2026)
Working Paper: The Eurozone's Achilles heel: Reassessing Italy's long decline in the context of European integration and globalization (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:00171

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