0 0 Jean-Philippe Cotis, OECD Chief Economist Competitiveness and structural policy challenges for...
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1 1 Jean-Philippe Cotis, OECD Chief Economist Competitiveness and structural policy challenges for Italy: some comments
Transcript of 0 0 Jean-Philippe Cotis, OECD Chief Economist Competitiveness and structural policy challenges for...
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Jean-Philippe Cotis, OECD Chief Economist
Competitiveness and structural policy challenges for Italy:some comments
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Relative unit labour costs have risen sharply
Trade-weighted relative unit labour costs in manufacturing
70
80
90
100
110
120
130
1991 1993 1995 1997 1999 2001 2003 2005
Inde
x, 1
991
=10
0
Italy France Germany Spain
3 3
…notably vis-à-vis Germany
Relative unit labour costs in manufacturing vis a vis Germany
60
70
80
90
100
110
1991 1993 1995 1997 1999 2001 2003 2005
Inde
x, 1
991
=10
0
Italy France Spain
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The deterioration in the trade balance has affected more intra than extra euro-area trade
Italian trade balance as a % of GDP
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
1991 1993 1995 1997 1999 2001 2003
EU-12 Rest of the world
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Labour productivity has stalled over the past decade
Labour productivity (total economy)
100
105
110
115
1996 1998 2000 2002 2004
Inde
x, 1
991
=10
0
Italy France Germany
6 6
Nominal wages have grown faster than in Germany
Nominal compensation per employee in business sector
90
95
100
105
110
115
120
125
130
1996 1998 2000 2002 2004
Inde
x, 1
991
=10
0
Italy France Germany
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Inflation has been relatively high and persistent
Consumer price deflator
90
95
100
105
110
115
120
125
130
1996 1998 2000 2002 2004
Inde
x, 1
991
=10
0
Italy France Germany
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Real labour cost have declined
Real compensation per employee in business sector
90
95
100
105
110
115
1996 1998 2000 2002 2004
Inde
x, 1
991
=10
0
Italy France Germany
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Is the quality of trade specialisation deteriorating?
Dynamic simulation of a standard export equation over 1982-2006
1.00E+11
1.50E+11
2.00E+11
2.50E+11
3.00E+11
3.50E+11
4.00E+11
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Ex
po
rts
- V
olu
me
- e
uro
s 2
00
0
0
5
10
15
20
25
30
35
40
45
50
Italian exports volume
Italian exports volume simulated
10 10OECD
Product market regulation remains strict in Italy despite substantial liberalisation
Product market regulation in OECD economies
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1998 2003
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Cross-country differences in PMR may have contributed to divergent productivity trends
1. Adjusted for hours worked.2. Indicator of economy-wide regulation excluding barriers to international trade and investment. The indicator ranges from 0 to 6, from least to most restrictive. See Nicoletti et al. (1999).
United StatesSweden
Spain
Portugal
New Zealand
Netherlands
Japan
Italy
Ireland
Greece
Germany
France
Finland
Denmark
Canada
Belgium
Australia
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
0.3 0.8 1.3 1.8 2.3 2.8 3.3
Difference in average MFP growth rate between 1990-2000 and 1980-1990 1
Correlation coefficient -0.51t-statistic -2.29
Product market regulation, inward oriented2, 1998
-1.5
-1.0
-0.5
0.0
0.5
1.0
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
United Kingdom
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Employment protection legislation remains stringent in international comparison
Stringency of employment protection legislation1 in selected OECD countries, 2003
GRCFRAESPPRT
1. Index scale of 0-6 from least to most restrictive.
0
1
2
3
4
US
A
GB
R
CA
N
CH
E
IRL
AU
S
DN
K
NZ
L
JPN
AU
T
ITA
FIN
NLD
BE
LS
WE
DE
U
GR
C
FR
A
ES
P
PR
T
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Italy ranks low in terms of PhD graduates and business sector researchers
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Italy has a much larger share of low-skilled workers than most other OECD countries
