Growth and cycles of the Italian economy since 1861: the new evidence

Based on a newly-available large set of historical national accounts, the paper revisits the main features of economic growth and cycles in Italy for the post-Unification period 1861-2011. Alongside the structural changes in growth dynamics, the main sources of output and productivity growth are identified. As regards the analysis of the underlying cyclical component, a business cycle chronology is first established and then both the specific patterns of individual cycles and the co-movements of output with key macroeconomic variables are investigated. In the 150 years since its political Unification, Italy's economic growth was mainly propelled by consumption and investments, whereas on the supply side the industry and services sectors were by far the main contributors, also because of the positive effect of labour reallocation to nonfarm activities. Over the same period, Italy experienced approximately 20 business cycles of varying duration and amplitude. Output fluctuations were dominated by the short-term variability of agricultural production before World War II and by fluctuations of the industry sector thereafter. The cyclical behaviour exhibited by aggregate demand components conforms quite well to that evidenced in the standard international business cycle literature, although some exceptions arise in the pre-World War II years

The industrial revolution and the great divergence: recent findings from historical national accounting

Recent work in historical national accounting is surveyed, focusing on the Industrial Revolution and the Great Divergence. Eighteenth century Britain was the first economy to make the transition to modern economic growth, but this breakthrough built on earlier episodes of per capita income growth with declining population in the fourteenth and seventeenth centuries. Between these two episodes, the economy remained on a plateau rather than shrinking back to Malthusian subsistence as population recovered. The crude idea of a modernising Europe forging ahead of a stagnating Asia needs to be modified to take account of regional variation within both continents. The Great Divergence can be dated to the eighteenth century when the leading European region forged ahead of the leading Chinese region. This can also be seen as the culmination of a dynamic process beginning in the fourteenth century, with a reduction in the frequency and rate of shrinking

China, Europe, and the Great Divergence: a study in historical national accounting, 980-1850

As a result of recent advances in historical national accounting, estimates of GDP per capita are now available for a number of European economies back to the medieval period, including Britain, the Netherlands, Italy, and Spain. The approach has also been extended to Asian economies, including India and Japan. So far, however, China, which has been at the center of the Great Divergence debate, has been absent from this approach. This article adds China to the picture, showing that the Great Divergence began earlier than originally suggested by the California School, but later than implied by older Eurocentric writers