Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279219 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10470
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
After 162 years of political unification, Italy still displays large regional economic differences. In 2019, the per capita GDP of Lombardia was 39,700 euros, but Calabria's per capita GDP was only 17,300 euros. We build a two-region, two-sector model of the Italian economy to measure the wedges that could account for the differences in aggregate variables between the North and the South. We find that the largest driver of the regional disparity in per capita output is the difference in total factor productivity, followed by fiscal redistribution. These two factors, together, account for more than 70 percent of the output disparity between the North and the South.
Subjects: 
Italian economy
macroeconomic wedges
regional fiscal redistribution
regional convergence
JEL: 
E10
E60
Document Type: 
Working Paper
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