What ever happened to Italy, happened in Italy

Spoiler: This post is a follow-up of a previous post and begins with the text and the graph of that post. That post showed that the Euro has had nothing to do with the poor developments of Italian exports. Instead, Italy has structural problems which date back a long time. A symptom of those problems is the low labour productivity and total factor productivity growth rates relative to the other countries who joined the Euro area at the same time as Italy, the EA12 countries.

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Graph of the Day- Globalisation saves children’s lives

A few days ago I posted this where I showed that Globalisation kills poverty. In this post I will show that globalisation saves the lives of children. As countries increasingly become integrated in the world economy by opening up their economies, national incomes rise.

Increasing incomes allow people to invest more in the health of their children. And higher incomes create resources that can be used to improve people’s health. More and better roads can be built so people can visit clinics, doctors, and hospitals easier and faster. The new roads also allow for better access to also goods and services such as pharmaceuticals and vaccines. And more clinics closer to people can be built and be supplies with better educated nurses and doctors than before. And the higher incomes make it possible to supply more people with electricity and water.

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Graph of the Day – Did the Euro hurt Italy’s “competitiveness”?

If Matteo Salvini, the right-wing Italian politician, would have its way, Italy should leave the Euro. Why? Because he thinks that the Euro is the root of Italy’s problems. He has argued that if only Italy would not have to follow EU budget rules, Italy could spend its way out of its problems and return to the growth it had before the Global Financial Crisis (GFC).

People believing that the Euro is the problem, claim that it hurts Italy’s “competitiveness”. If that is correct, Italy’s problems began sometime after she joined the Euro area. If this is correct, we should see a negative effect on Italy’s exports after the introduction of the Euro. Let’ s have a look!

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Graph of the Day – Globalisation kills poverty

Following the corona outbreak, some countries closed their borders and banned exports of medical supplies. Populistic politicians want their countries to become more “self-sufficient”. According to them, that would also decrease our exposure to viruses like Covid-19. But arguing that more self-sufficiency, aka protectionism, would kill two birds with one stone is terribly wrong.

The arguing is wrong because less trade would make us poorer and leave us with fewer resources to combat viruses. Producing our own ventilators, medicines, vaccines, all the protective equipment we need, would be more expensive than buying from countries that now produce them more efficiently. Some of these products, e.g. ventilators, consist of many parts which now are produced in many different countries all over the world. If we were to produce them ourselves, we would need to set up plants to also produce those parts and extract the raw material which is used in the production processes.

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