The IT Revolution and Italy’s Two L ost Decades (with Tom Schmitz)
Abstra ct:
Since the middle of the 1990s, real GDP per worker has been growing much more slowly in Italy than in other developed countries. In this paper, we analyze how much the IT Revolution has contributed to this divergence. Firm -level evidence shows low adoption and unproductive use of IT in Italy, and suggests that this is due to inefficient management practices. To analyze the quantitative importance of these phenomena, we build a general equilibr ium model with heterogeneous firms and workers, migration, management and I T adoption choices. We use this model to compare two countries, Italy and G ermany, which we assume differ only in their level of management efficiency . Our calibrated model, disciplined by the firm-level evidence, suggests th at the growth triggered by the IT Revolution in Italy represents only aroun d XX% of the corresponding figure for Germany. Therefore (depending on the assumptions regarding the aggregate impact of IT in Germany), the IT Revolu tion is responsible for between XX% and XX% of the divergence in Italy’s an d Germany’s GDP per worker between 1995 and 2015. In Italy, lower managemen t efficiency has limited the productivity gains from IT and become a more s alient problem as IT increased the aggregate importance of managers. It has also limited the wage increases of high-skilled workers, and therefore pus hed more of them to emigrate.
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DTSTAMP:20260427T195511Z DTSTART:20171212T130000Z DTEND:20171212T140000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR