Recessions, recoveries and regional resilience: Evidence on Italy

Di Caro, Paolo (2014): Recessions, recoveries and regional resilience: Evidence on Italy. Forthcoming in: Cambridge Journal of Regions, Economy and Society (2014)

Abstract

This paper analyses regional resilience and local economic growth patterns in Italy over the past four decades. Place-specific transient and permanent effects of aggregate employment shocks are studied. Geographical asymmetries in engineering and ecological resilience are found, providing auxiliary insights on the rooted Italian regional inequalities. The territorial impact of different crises is investigated and a direct comparison with the UK case is offered. The importance of manufacturing activities for explaining economic resilience is assessed, finding out a positive relation between the resilience of the industrial sector and the overall local economic development. Some policy implications are conclusively discussed.

• Item Type: MPRA Paper
• English Title: This paper analyses regional resilience and local economic growth patterns in Italy over the past four decades. Place-specific transient and permanent effects of aggregate employment shocks are studied. Geographical asymmetries in engineering and ecological resilience are found, providing auxiliary insights on the rooted Italian regional inequalities. The territorial impact of different crises is investigated and a direct comparison with the UK case is offered. The importance of manufacturing activities for explaining economic resilience is assessed, finding out a positive relation between the resilience of the industrial sector and the overall local economic development. Some policy implications are conclusively discussed.
• Language: English
• Keywords: recessions, recoveries, regional resilience, local economic growth
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics

References

A’Hearn, B. and A.J. Venables (2013), Regional Disparities: Internal Geography and External Trade, The Oxford handbook of the Italian economy since unification, 599-630.

Ball, L.M. (2014), Long-Term Damage from the Great Recession in OECD Countries, NBER working paper, n. 20185.

Bank of Italy (2010), Il Mezzogiorno e la politica economica dell’Italia, Roma.

Barrios, S. and J.J. Lucio (2003), Economic integration and regional business cycles: Evidence from the Iberian regions, Oxford Bulletin of Economics and Statistics, 65(4):497-515.

Bassanetti, A., M. Cecioni, A. Nobili, and G. Zevi (2010), Le principali recessioni italiane: un confronto retrospettivo, Rivista di politica economica, (7): 281-318.

Beyer, A. and R.E.A. Farmer (2007), Natural rate doubts, Journal of Economic Dynamics & Control, 31: 797-825.

Boschma, R. (2014), Towards an evolutionary perspective on regional resilience, Papers in Evolutionary Economic Geography, no. 14.09, Utrecht University, Utrecht.

Brugnoli, A. and S. Fachin (2001), Testing economic geography: Italy, 1951-1991, Economics Bulletin, vol. 18(1):1-7.

Caselli, F. and N. Gennaioli (2013), Dynastic management, Economic Inquiry, 51(1):971-996.

Cellini, R. and G. Torrisi (2014), Regional resilience in Italy: a very long-run analysis, Regional Studies, (ahead-of-print), 1-18.

Charles, D., F. Kitagawa and E. Uyarra (2014), Universities in crisis? new challenges and strategies in two English city-regions, Cambridge Journal of Regions, Economy and Society, rst029.

Christopherson, S., J. Michie and P. Tyler (2010), Regional resilience: theoretical and empirical perspectives, Cambridge Journal of Regions, Economy and Society, 3: 3–10.

Daniele, V. and P. Malanima (2007), Il prodotto delle regioni e il divario Nord-Sud in Italia (1861-2004), Rivista di politica economica, 267-315.

De Haan, J., R. Inklaar, and R. Jong-A-Pin (2008), Will business cycles in the euro area converge? A critical survey of empirical research, Journal of Economic Surveys, 22(2):234-273.

Del Monte, A. and A. Giannola (1997), Istituzione economiche e Mezzogiorno: analisi delle politiche di sviluppo, La Nuova Italia Scientifica, Roma.

Doran, J. and B. Fingleton (2013), US Metropolitan Area Resilience: Insights from Dynamic Spatial Panel Estimation, BEG Working Paper, School of Economics, University College Cork.

Fingleton, B., H. Garretsen, and R. Martin (2012), Recessionary shocks and regional employment: Evidence on the resilience of UK regions, Journal of Regional Science, 52(1):109-133.

Fingleton, B., H. Garretsen, and R. Martin (2014), Shocking aspects of Monetary Union: the vulnerability of regions in Euroland, Journal of Economic Geography, forthcoming.

Fingleton, B. and S. Palombi (2013), Spatial panel data estimation, counterfactual predictions, and local economic resilience among British towns in the Victorian era, Regional Science and Urban Economics, 43:649-660.

Garcia-Mila, T. and T.J. Mc Guire (1993), Industrial mix as a factor in the growth and variability of states' economies, Regional Science and Urban Economics, 23(6): 731-748.

Garretsen, H., P. McCann, R. Martin and P. Tyler (2013), The future of regional policy, Cambridge Journal of Regions, Economy and Society, 6(2):179-186.

Giannola, A. (1982), Industrializzazione, dualismo e dipendenza economica del Mezzogiorno negli anni ‘70, Economia Italiana, 4: 65-90.

Graziani, A (1978), The Mezzogiorno in the Italian economy, Cambridge Journal of Economics, 2:355-372.

Groot, S.P.T., J.L. Möhlmann, J.H. Garretsen, and H.L.F. De Groot (2011), The crisis sensitivity of European countries and regions: stylized facts and spatial heterogeneity, Cambridge Journal of Regions, Economy and Society, 4(3):437-456.

Gudgin, G. (1995), Regional problems and policy in the UK, Oxford Review of Economic Policy, 11(2):18-63.

Hamilton, J.D. and M.T. Owyang (2012), The propagation of regional recessions, The Review of Economics and Statistics, 94(4): 935 – 947.

Harding, D. and A. Pagan (2002), A comparison of two business cycle dating methods, Journal of Economic Dynamics & Control, 27: 1681-1690.

Martin, R. (2012), Regional economic resilience, hysteresis and recessionary shocks, Journal of Economic Geography, 12(1):1-32.

Martin, R. and P. Sunley (2006), Path dependence and regional economic evolution, Journal of Economic Geography, 6(4):395-437.

Martin, R. and P. Sunley (2014), On the notion of regional economic resilience: conceptualisation and explanation, Journal of Economic Geography, July:1-42.

Mastromarco, C. and U. Woitek (2007), Regional business cycles in Italy, Computational Statistics & Data Analysis, 52(2):907-918.

Miniaci, R. and G. Weber (1999), The Italian recession of 1993: aggregate implications of microeconomic evidence, The Review of Economics and Statistics, 81(2):237-249.

Ng, E.C.Y. (2010), Production fragmentation and business-cycle comovement, Journal of International Economics, 82(1):1-14.

Owyang, M.T., J.M. Piger, H.J. Wall and C.H. Wheeler (2008), The economic performance of cities: A Markov-switching approach, Journal of Urban Economics, 64(3): 538-550.

Paci, R. and F. Pigliaru (1998), Growth and sectoral dynamics in the Italian regions, in Adams, J. and F. Pigliaru (eds.), Beyond Convergence: National and Regional Patterns of Growth and Change, Cheltenham, Edward Elgar.

Pellegrini, G. (2005), Modelli di diffusione territoriale dell’industria manifatturiera in Italia, in Signorini, F. & P. Omiccioli, Economie locali e competizione globale, Il Mulino, Bologna.

Porter, M.A. (2003), The economic performance of regions, Regional Studies, 37(6-7): 549-578.

Pike, A., S. Dawley and J. Tomaney (2010), Resilience, adaptation and adaptability, Cambridge Journal of Regions, Economy and Society, 3(1): 1-12.

Rodrik, D. (2013), Unconditional convergence in manufacturing, Quarterly Journal of Economics, 128(1): 165-204.

Simmie, J. and R. Martin (2010), The economic resilience of regions: towards an evolutionary approach, Cambridge Journal of Regions, Economy and Society, 3(1): 27-43.

SRM - Prometeia (2014), L’interdipendenza economica e produttiva tra il Mezzogiorno ed il Nord Italia. Un Paese più unito di quanto sembri, Giannini Editore, Napoli.

Wall, H.J. (2013), The employment cycles of neighboring cities, Regional Science and Urban Economics, 43:177-185.

Wilkerson, C.R. (2009), Recession and recovery across the nation: lessons from history, Federal Reserve Bank of Kansas City Economic Review, Second Quarter, 5-24.