Italian Economics

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?