We are currently in Florence, Italy on vacation. We've eaten great food, sampled terrific wine, enjoyed the scenery--and most importantly, settled into the Italian lifestyle.
After a week of experiencing the organized chaos, I have to ask "How does the Italian economy survive?" The answer of course is that it does, although not as well as others.
A quick look around and you'll discover that shops are open irregularly, are frequently unattended, and look as though the accounting is informal at best. I could swear that most Italians were more interested in frequent caffes and walks than anything else.
Okay, so my economic research this past week has been a little less than scientific. But it has been an excellent opportunity to observe the local Italian economy in a hands-on, personal, manner.
Can my empirical observations be substantiated? The short answer is yes--the very desirable lifestyle (morning caffe's, afternoon walks, condensed work-weeks, etc.) comes with a very real trade-off.
The latest annualized quarterly release of GDP for Italy (-1.1) is well below other advanced economies. (The US GDP was recently revised to -.5.) What about other important metrics?
Again, Italy is below its peers.
| Italy | US | Great Britain |
| GDP/Capita* | 40,150 | 47,750 | 43,270 |
| Labor prod growth (%) | -.9 | 1.2 | 0 |
| Unemployment | 6.9% | 5.7% | 5.7% |
So, the question is? Is it worth it?
Posts
