Ways to Boost Enterprise and Inclusion: Ownership, the Underground, Tax Structure

  • Edmund S. Phelps


The 1st Semi-annual Report, of November 1997, discussed the causes of the decline suffered in Italy between the mid-’70s and the early ’90s in enterprise and in inclusion. The decline in enterprise is evidenced by a range of data including a striking contraction of employment in the business sector (rivaled only by Scandinavia and Portugal) and a plunge in the growth rate of total factor productivity within the business sector (from the league-leading rate to a rate in line with that in the U.K.).[1 The decline in inclusion is reflected both by the large rise in the unemployment rate (to a level now one of the highest in Western Europe) and even more strikingly by the participation rate, which has fallen further from its already deficient level since 1980, especially in the formal economy (thus leaving the participation rate markedly lower than in France, Spain and Portugal and far below the rates found elsewhere in Western Europe).2 The Report explained that the two problems—slowdown and slump—are strongly linked. Much of the decline of inclusion can be explained statistically by the cessation of the breakneck productivity growth enjoyed in the period of the economic miracle. And no doubt some of the growth slowdown can be attributed to the pressures, public and private, on firms and banks to reject downsizing and maintain job security.


Unemployment Rate Wage Rate Organize Crime Private Firm Wall Street Journal 
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Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Edmund S. Phelps
    • 1
  1. 1.USA

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