This paper provides a concise economic profile of Italy in the early 2000s, covering key indicators such as GDP and GDP per capita, income distribution measured by the Gini Coefficient and Lorenz Curve, the adoption of the Euro, government spending and revenue, public debt levels, and balance of payments. Drawing on data from the Economist Intelligence Unit, the CIA World Factbook, and the European Foundation for the Improvement of Living and Working Conditions, the paper situates Italy as the third-largest economy in the Euro-11, while highlighting persistent regional disparities between the industrialized north and the underdeveloped south.
Italy enjoys one of the largest economies in the Euro-11, ranking third behind France and Germany. Italy was unified in 1861 following nearly 1,400 years of domination by city-states, foreign powers, and the Papal See. During these years, distinct cultures developed in the north and south, leading to great economic disparities. The north, with its Venetian, Milanese, and Florentine heritages, developed a strong industrial economy. By comparison, the south, formerly dominated by Naples and the Kingdom of the Two Sicilies, remains largely rural and underdeveloped.
Italy's GDP for 2001 was 1,217 billion Euros, or approximately $1,095 billion at the average exchange rate for that year (Economist Intelligence Unit, January 7, 2003). Estimated GDP for 2002 was $1.438 trillion after adjustments for Purchasing Power Parity (PPP), with a 2002 per capita GDP of $25,000 after a similar adjustment (The World Factbook, 2002).
GDP per capita stood at $18,800 in 2001, while GDP per capita adjusted for purchasing power parity was $26,150. This represented an increase from $25,230 in 2000 and $24,025 in 1999. Overall GDP grew at an average of 2% between 1997 and 2001 (Economist Intelligence Unit, January 7, 2003). It should be noted that purchasing power adjustments used by the Economist and the CIA's World Factbook differ slightly.
Income distribution in Italy is surprisingly egalitarian. In economic terms, the country has a favorable Lorenz Curve and a low Gini Coefficient. Although income distribution is not as egalitarian as that found in Scandinavian countries, it favors the poor and middle class more than in the United Kingdom or the United States. Wage and income distribution nonetheless favors the industrial north over the agrarian south, which suffers from roughly 20% unemployment.
In 2000, the top 10% of the population earned 27% of GDP, whereas the bottom 10% earned just 2% of GDP (The World Factbook, 2002). A report published by the European Foundation for the Improvement of Living and Working Conditions in Fall 2002 showed that inflation had re-emerged and that the growing disparity between productivity growth and wage growth had caused many to question whether a meaningful process of income redistribution would emerge.
"Euro adoption and exchange rate movements"
"Fiscal policy, tax rates, and public debt levels"
"Export, import, and current-account balance data"
You’re 54% through this paper. Sign up to read the remaining 3 sections.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.