Working Paper Abstract No. 378

Two Mezzogiornos

by Hans-Werner Sinn and Frank Westermann

Contents: [ Abstract | Download | Citation | Contact]

• Abstract
  
  The analogy between the economic problems of the Mezzogiorno region and East Germany has been initially contested by many authors. This paper argues that there are striking similarities in the two regions, in terms of the causes of their economic predicament. With an aggregate labour productivity of less than 60% relative to the rest of the country, both are true transfer economies, whose consumption exceeds production by far. Beyond locational disadvantages, the present paper identi fies overdrawn wages, high social security spending and the Dutch disease problem as core reasons for the poor economic performance and discusses possible cures.
  
  JEL Classification: H0, O52
  
  
• Download
  
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• Citation
  
  Sinn, Hans-Werner and Frank Westermann (December 2000): "Two Mezzogiornos", CESifo Working Paper Series 378, CESifo, Munich.
  
  
• Contact
  
  Hans-Werner Sinn
  CESifo, Poschingerstr. 5, 81679 Muncih, Germany, email: Sinn@cesifo.de

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