Policy Article

Italy at the crossroads: weak growth requires further reforms (original publication in German)

Kiel Policy Briefs, 102

The Italian economy has experienced a prolonged period of economic weakness which is especially problematic given the high level of public. The constitutional reform proposed by the Renzi government is meant to reduce the institutional barriers to the implementation of structural reforms necessary to reinvigorate the economy. Against this background, the authors give an overview of the economic situation in Italy from a macroeconomic perspective and evaluate recent reform initiatives. All in all, the reform packages introduced since 2011 move in the right direction, although model-based assessments and first empirical evidence suggest that they will not fundamentally change the overall picture of relatively low potential growth.