Changes In Aggregate Supply Conditions In Italy: a Small Econometric Model And Its policy Implications

摘要

This paper examines aggregate supply conditions in Italy and how they changed from the 1970s to the late 1990s. Based on a VAR model for wages, prices, productivity, unemployment and exchange rate the cointegration properties of the data in nominal and real terms are analysed. Analysis is based on a model directly derived from the work of [Modigliani, F., & Padoa Schioppa, T. (1977). La politica economica in un'economia con salari indicizzati al 100 o piu. Moneta e Credito, 117,3-53]. Our results - giving empirical evidence for the existence of a link between labour market reform, employment and wage flexibilization -provide a major incentive for labour market reforms in Italy. The pressure for reintroducing mechanisms for partial wage purchasing power defence are resolutely discouraged. Normative aspects of 'concerta-tion' should be positively reappraised as compared to wage aspects. Other notable policy implications are highlighted in the paper.