Alessandro Bramucci

We analyse Italy’s growth pattern from 2001 to 2019 using the demand and growth regime categories proposed in the post-Keynesian tradition and recently adopted in the comparative political economy (CPE) literature. We argue that after the Global Financial and Economic Crisis (GFEC), Italy followed an export-led recovery strategy. In this respect, Germany’s growth model emerged as the successful model to follow. In the dominant view, Germany’s economic success since the mid-2000s was attributed to a series of painful but necessary economic reforms. The success of Germany’s export-led mercantilist regime became particularly attractive to Italy given the similar export-oriented manufacturing industry. However, Italy has followed the ‘wrong’ German model based on wage compression and restrictive budget policies while the ‘true’ German model is based on non-price competitiveness factors.

Although austerity was particularly strong in the aftermath of the economic crisis of 2008 and its consequences in the euro area, Italian fiscal policies have been characterised by tough consolidation periods ever since the 1990s.