Transcript ITALY, THE ECONOMIC AND FINANCIAL OUTLOOK, slides, A

Report on the crisis: a scenario analysis
Notes on the distribution of
income, growth and
employment
A. Berrini, Economist
The only positive aspect is that the
2011 was better than what does
the 2012"
J. Stiglitz
From the "V" to "L": the risk is
depression
The world economy now finds himself without a
locomotive
- The economic slowdown is a fact
- Can we avoid a long depression?
It is urgent a change with regard to economic
policies and development patterns
The international economic scenario
The recovery of the U.S. continues weakly
The market does not support the dynamics of consumption
The trend of development in emerging countries is low
compared to previous years
The trajectory of the EU economies differs from the path out of
recession
The indicators show that the recession in the Euro zone and
the UK is widening
The European economic policy: the
wrong prescription of austerity
“ Austerity alone will kill the patient. No big
economy has never recovered only with this
medicine.
In the few cases where it worked was for small
economies and because of the factors on
which Europe cannot count:
devaluation or the economic boom of a country
to which you export "
J. Stiglitz
The European economic policy: the
wrong prescription of austerity
• The liberal scheme has combined with an expansionary
monetary policy to a restrictive fiscal policy in a context of
deregulation of financial markets
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Effect: slow growth and speculative attacks on the
sovereign debt
Alternative: fiscal stimulus to support growth, strictly
regulated to protect public budgets by speculative attacks
The Italian depression
Example of Italy that "U" becomes "L"?
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Starting with the 100 since 2007, Italy in 2012 has:
GDP = 93;
INVESTIMENTS = 86
CONSUMPTION= 95
USE = 69
Income distribution, growth and
employment
1% population has 39% global wealth
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Profit distribution of thr liberal three decades:
POPULATION
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+ rich (1%) = + 275% + poor (20%) = + 18%
PATRIMONY
20 persons + rich = 237.000.000 persons
Income distribution in Italy
10% italian family has > 40 % Net wealth in Italy
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By a survey of Bank of Italy (03.04.2012)
10% of families receive 27% of total income
PATRIMONY
10 Italian people+ rich = 3.000.000 italians
Distribution of income: the causes of
inequality
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Within of developed countries,
technological progress is seen as a
cause of rising inequality
Actually recent studies have shown a link
between income inequality and financial
deregulation
Distribution of income: the causes of
inequality
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“The highest incomes are strongly
influenced by social norms"
“The sharp decline of unionization in the
'80s has taken away one of the most
important opponents of the rich salaries
for executives”
P. Krugman
Growth and Income Distribution
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The extreme concentration of income
adversely affects demand, produces low
growth and crisis
The crisis produces unemployment which
increases inequality that worsen the economic
situation
Growth and employment
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We are in a trap. We know that we must
increase productivity to grow back, but this
requires to produce with fewer people.
Only effective tools of welfare allows the
market to be efficient, but unfair, at least
enough to support growth.
Growth and employment
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"The problem of work is the drama of all
advanced economies"
• "If such a system would necessarily imply
instability, and the expulsion from the labor
market of the future generation then there
would be many changes both in market
operations both in the role of the States"
R. Prodi