TY  - JOUR
AU  - Sinn,Hans-Werner
AU  - Westermann,Frank
TI  - Two Mezzogiornos
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8125
PY  - 2001
Y2  - February 2001
UR  - http://www.nber.org/papers/w8125
L1  - http://www.nber.org/papers/w8125.pdf
N1  - Author contact info:
Hans-Werner Sinn
Ifo Institute -
Leibniz Institute for Economic Research
at University of Munich
Poschingerstr. 5
81679 Munich
GERMANY
Tel: 49-89-21802748
Fax: 49-89-397303;49-89-8506434 (home)
E-Mail: sinn@ifo.de

Frank Westermann
Department of Economics
Rolandstr. 8
49069 Osnabrueck, Germany
E-Mail: Frank.Westermann@uni-osnabrueck.de
AB  - 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 55% relative to the rest of the country, both are true transfer economies, whose consumption exceeds production by far.  Beyond locational disadvantages, the present paper identifies overdrawn wages, high social security spending and the Dutch disease problem as core reasons for the poor economic performance and discusses possible cures.
ER  -