The Italian need to reflect more on their business model for their Italy
Sir, Martin Wolf argues that “Fiscal tightening and reform can rescue Italy’s economy” October 25, among others because Italy has a plentiful reserve of women not working, though it is not very clear whether having more women working is the type of reform he suggests or a response to the lack of other reforms. If the first, we guess the Italians themselves would like to have a say before going down Wolf’s reform path.
That said and in order for the whole suggested exercise to proceed smoothly Wolf also mentions the need for sustaining domestic demand, for which he neo keynesially recommends that since the government has run out of borrow and spend power, the private households should now have a go at it.
Presenting OECD figures that show that in 2004 the ratio to GDP of medium and long term-loans to household was “just” 37 per cent against 114 per cent in the UK, he thinks Italian household have ample room for more debt, though many of us humans would tend to react with some horror over the UK figure.
Whatever, before taking up Wolf’s suggestions about going into debt and given that globalization acts in many and strange ways, we believe the Italians should reflect a bit more on their business model for their Italy.
Martin Wolf Italy
That said and in order for the whole suggested exercise to proceed smoothly Wolf also mentions the need for sustaining domestic demand, for which he neo keynesially recommends that since the government has run out of borrow and spend power, the private households should now have a go at it.
Presenting OECD figures that show that in 2004 the ratio to GDP of medium and long term-loans to household was “just” 37 per cent against 114 per cent in the UK, he thinks Italian household have ample room for more debt, though many of us humans would tend to react with some horror over the UK figure.
Whatever, before taking up Wolf’s suggestions about going into debt and given that globalization acts in many and strange ways, we believe the Italians should reflect a bit more on their business model for their Italy.
Martin Wolf Italy
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