Economics Roundtable

Database Maintenance 7/4/15

Routine database maintenance will induce some duplicated items for the next day or two.


May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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August 5, 2015, 3:33 am, 1522246
Odds Rise as Fed Governor Lockhart Speaks

The Financial Times reports September Rate Rise Odds Improve as Lockhart Speaks.

Expectations that the Federal Reserve will lift interest rates in September popped on Tuesday after Dennis Lockhart, president of the Atlanta Fed, said there would need to ...


August 5, 2015, 2:44 am, 1522185

There has been much talk about using macroprudential policy to manage systemic risk and reduce negative spillovers, but there is little agreement on how it could be operationalised. This column highlights the findings of a new book on the topic and offers a framework for operationalising macroprudential policy. Macroprudential measures, ...


August 5, 2015, 2:44 am, 1522184

Some financial authorities have proposed designating asset managers as systemically important financial institutions (SIFIs). This column argues that this would be premature and probably ill conceived. The motivation for such a step comes from an inappropriate application of macroprudential thought from banking, rather than the underlying externalities that might cause ...


August 5, 2015, 2:44 am, 1522183

Fish business CEO Roger Berkowitz tells Russ that his guiding philosophy is RoG, or Return of the Guest. Says Berkowitz, "And what I'm simply trying to do is make sure that we can enhance the overall experience that are going to encourage people to want to come back again." ...


August 5, 2015, 2:04 am, 1522181

Over the last quarter Singapore’s gdp fell at an annualized rate of 4.6%, in large part because of China problems (that’s your “China fact of the day”).  And household debt is about 75% of gdp.  Yet the nation’s finances are much sounder than that may sound, ...


August 5, 2015, 12:04 am, 1522138
(August 4, 2015 10:05 PM, by Alberto Mingardi) The Daily Telegraph reports that Robert Conquest has died at age 98. He was one of the great historians of our time and we all owe him much, for he was a key person in explaining what Soviet communism really... (0 ...


August 4, 2015, 10:04 pm, 1522073
People who follow British Association Football (Soccer, Football, Footie) know that it consists of a number of tiered Leagues which have annual processes of relegation and promotion as the bottom performing teams move down a tier while the top performing ones in the lower tier move up. I suggest we ...


August 4, 2015, 9:33 pm, 1522072
Record Manufacturing Contraction

Greece may as well have gone to hell in a handbasket. Carnage is everywhere one looks, but let's start with the Markit Greece PMI report that shows record manufacturing contraction.

July saw factory production in Greece contract sharply amid an unprecedented drop in ...


August 4, 2015, 7:03 pm, 1521945
From Jon Hilsenrath at the WSJ: Atlanta Fed’s Lockhart: Fed Is ‘Close’ to Being Ready to Raise Short-Term Rates

“I think there is a high bar right now to not acting, speaking for myself,” Mr. Lockhart said ...

Wednesday:
• At 7:00 AM, the Mortgage Bankers Association (MBA) will release ...


August 4, 2015, 6:44 pm, 1521943
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August 4, 2015, 6:04 pm, 1521937

1. Chart of the Day I (above). According to data from the Airlines for America (available here), the average airfare round-trip airfare last year was $377.39 (see light blue line above), the average baggage fee was $12.51, and the average round-trip airfare ...


August 4, 2015, 6:04 pm, 1521936

Southeast Asia is of growing importance to the United States. Unlike a number of countries in East Asia, those of Southeast Asia have healthy demographic profiles and the potential for robust economic growth. And as China seeks to expand its diplomatic influence and military power throughout the Asia-Pacific region, this ...


August 4, 2015, 6:04 pm, 1521935

As politicians grapple with the issue of student debt, a few have turned to a novel financing option called income-share agreements (or ISAs) as one part of the solution on this issue. Presidential candidates Sen. Marco Rubio, R-Fla., who introduced ISA legislation in 2014, and Gov. Chris ...


August 4, 2015, 5:33 pm, 1521934
In response to Ukraine's Ultra-Right Militia Threatens Military Coup, I received an email from Jacob Dreizin on statements made by the Financial Times that I quoted.

Jacob writes ...

Hello Mish,

The FT was inexcusably sloppy in its writing. Here's a quick clarification.


August 4, 2015, 5:33 pm, 1521933

1. Chart of the Day I (above). According to data from the Airlines for America (available here), the average airfare round-trip airfare last year was $377.39 (see light blue line above), the average baggage fee was $12.51, and the average round-trip airfare ...


August 4, 2015, 5:03 pm, 1521872
From housing economist Tom Lawler:

Below is a table showing some selected operating statistics for nine large, publicly-traded home builders for the quarter ended June 30, 2015.

As the table indicates, reported net home orders for these nine home builders in the quarter ended June 30, 2015 were ...


August 4, 2015, 4:44 pm, 1521871
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August 4, 2015, 4:34 pm, 1521867

By James Kwak

Tom Hayes was a trader at UBS and Citigroup who was very, very good … at rigging LIBOR. This week, he was convicted in the United Kingdom of conspiring to manipulate the benchmark interest rate and sentenced to fourteen years in prison.


August 4, 2015, 4:34 pm, 1521866
Teaser:

Renewables ...


August 4, 2015, 4:34 pm, 1521865
Teaser:


August 4, 2015, 4:04 pm, 1521863
(August 4, 2015 03:44 PM, by Scott Sumner) If I might be allowed a bit of armchair philosophical speculation, it seems to me that the advance of technology and utilitarianism are two of the most relentless trends in world history. The growing importance of technology is easy to... (0 ...


August 4, 2015, 4:04 pm, 1521862
Fellow Jonah Goldberg discusses Donald Trump's threat of running as a third party candidate on Fox News' 'America's Newsroom'


August 4, 2015, 3:33 pm, 1521856
Factory orders rose for only the second time in eleven months, in line with the Consensus Estimate.

Factory orders rose nearly as expected in June, up 1.8 percent for only the second gain in the last 11 months. The durable goods component, initially released last week, is ...


August 4, 2015, 3:33 pm, 1521854

Just checking on the Sunstein tweet, this is from EPA's Regulatory Impact Analysis (PDF):

The answer is yes. By 2030, the co-benefits are estimated to ...


August 4, 2015, 3:33 pm, 1521855

Krugman:

One of the most obvious facts about the U.S. political scene is also a fact most pundits refuse to acknowledge: the extreme polarization we now experience, the complete disappearance of any kind of political center, is not a two-sided phenomenon. Democrats haven’t moved drastically to the left — if ...


August 4, 2015, 3:33 pm, 1521853

RFF says "I told you so":

Over the past few weeks, we’ve written about ten things to look for (see the links below) when EPA releases its final Clean Power Plan—which the agency did today. In the days and weeks to ...


August 4, 2015, 3:33 pm, 1521852

The Onion:

President Obama unveiled Monday a plan to increase the country’s clean power usage that many are calling the strongest action ever taken by a U.S. president to combat the effects of climate change. Here are some key details of Obama’s climate change plan: Immediate removal of smokestacks atop White House Designates ...


August 4, 2015, 3:03 pm, 1521791
A new Pacific trade bloc could help the U.S. and Japan recover lost Asia market share. KAZUHIRO NOGI/AFP/GETTY IMAGES

Remember when the U.S. and Japan dominated trade ...


August 4, 2015, 3:03 pm, 1521790
Mario Polo, of Boston Market, left, talks to job seekers Herby Joseph, right, and Kingsly Jose, center, at a job fair in Sunrise, Fla., in June. 


August 4, 2015, 3:03 pm, 1521789

And one more before heading out the door. From Tim Taylor:

The US Financial Sector in the Long-Run: Where are the Economies of Scale?: A larger financial sector is clearly correlated with economic development, in the sense that high-income countries around the world have on average larger markets for ...


August 4, 2015, 3:03 pm, 1521788

On the road again, so just a couple of quick posts. This is Paul Krugman:

Sarcasm and Science: Paul Romer continues his discussion of the wrong turn of freshwater economics, responding in part to my own entry, and makes a surprising suggestion — that Lucas ...


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August 4, 2015, 2:44 pm, 1521782

Last week I introduced to Credit Slips readers my draft article on federal court oversight of ...


August 4, 2015, 2:04 pm, 1521776

The announcement of the death of Taliban founder and leader Mullah Mohammad Omar (some two years after it occurred) has attracted attention to Afghanistan’s insurgency once again. And it’s about time. That insurgency has regained strength and capability in many areas of Afghanistan, including critical provinces close to the ...


August 4, 2015, 2:04 pm, 1521777
Senior Fellow John Bolton discusses challenges to US interrogation policies on Fox News' 'America's Newsroom'


August 4, 2015, 2:04 pm, 1521775

 Some lunchtime reading:

Facebook Live Events Could Command A Truly Global Audience – Wired – “With its massive reach, Facebook could attract a truly global live audience that it could serve up to advertisers seeking to connect with the whole world.”

You Don’t Have to ‘Like’ the News to Respect It – ...


August 4, 2015, 2:04 pm, 1521774

Despite their “quiet professional” ethos, special operations forces have received a lot of attention in the past several years. From movies such as “Zero Dark Thirty” to speeches at football games and graduations, recent, public conversation about special operations forces has dispelled many of the myths and legends about this ...


August 4, 2015, 1:33 pm, 1521770

Yesterday I commented on Mankiw's post where he inexplicably linked carbon tax revenue to lower income taxes, as is his wont. We received a comment about the optimal Pigouvian tax. I think this excerpt summarizes well:

Even in the simplest settings there's also a tax-interaction effect whereby ...


August 4, 2015, 1:33 pm, 1521769

The new climate change rule makes a lot of economic sense; the cost is justified by the public health benefits alone. http://t.co/PYX8sfPtu1

— Cass Sunstein (@CassSunstein) August 3, 2015


August 4, 2015, 1:33 pm, 1521768
Michael Roberts is a top agricultural economist. Here is his Google Scholar page. He earned his Ph.D. at the UC Berkeley. UC Berkeley is a major trainer in agricultural and environmental economics and it is center of behavioral economics. This blog post will touch on both of these ...


August 4, 2015, 1:03 pm, 1521707
Residential properties displayed in a London estate agent. U.K. homeowners are mindful of a future Bank of England rate increase. So why should they care about the Fed’s monetary ...


August 4, 2015, 1:03 pm, 1521706
Cambodian workers walk past a construction site in Phnom Penh in July. Researchers found differences in estimates for getting a construction permit in the country. The World Bank’s “Doing ...


August 4, 2015, 1:03 pm, 1521705
A few excerpts from a research note by Goldman Sachs economists David Mericle and Karen Reichgott: What's Keeping the Kids at Their Parents' Homes?

The share of 18-34 year-olds living with their parents rose about four percentage points (pp) during the recession and its aftermath, resulting in a few million ...


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August 4, 2015, 12:04 pm, 1521695

…Even Cowen tells OZY that even he doesn’t want Tabarrok to “entirely get his way” on all things…

Otherwise it is all about Alex, but that is my cameo.  It is a good and fun profile, though I think it understates Alex’s pragmatic side somewhat.  The author is Sanjena ...


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August 4, 2015, 12:04 pm, 1521694

It’s a TED-style talk, and Alex Tabarrok is just getting going, dressed in D.C.-friendly attire (dark gray suit) in front of the usual casual-hip crowd at the Voice & Exit conference in Austin, Texas. Pacing behind the podium, he flashes images of workers, of wastrel, skeleton-thin immigrants seeking labor. Your ...


August 4, 2015, 12:04 pm, 1521692
(August 4, 2015 12:06 AM, by Bryan Caplan) One of the main things I learned while writing The Case Against Education: Contrary to almost everyone, student loans are virtually the least objectionable government subsidy for college. Why? As you know, I firmly subscribe to the view that -... (2 ...


August 4, 2015, 12:04 pm, 1521691
Resident Fellow Matthew McInnis discusses the Iran nuclear agreement on Al Jazeera America


August 4, 2015, 12:04 pm, 1521690

With India seeking a greater role in world affairs, Afghanistan and Pakistan in turmoil, and Chinese influence on the rise, South Asia is a crucible for many of the foreign policy questions the next president will face. What can the US do ...


August 4, 2015, 12:04 pm, 1521689

Government policies virtually without exception create economic distortions, so that policy reform can yield results highly counterintuitive. That is the case with the emerging effort to end the current U.S. ban on the export of crude oil, enacted as part of the 1975 Energy Policy and Conservation Act. The ban ...


August 4, 2015, 12:04 pm, 1521687

When Ben Horowitz was asked last November by Stanford Professor Tom Byers how the venture capital firm Andreessen-Horowitz (“a16z”) became so successful so quickly, and was able to crack open what had been an exclusive and self-perpetuating club of top VCs, Horowitz replied, “We were the first VC firm to ...


August 4, 2015, 12:04 pm, 1521688

Sir,

Contrary to your recommendation in “The world gears up for a surge in the greenback” (editorial, August 1), the Federal Reserve would be ignoring dollar movements at its peril. Since a further sharp dollar appreciation would substantially cloud the emerging market economic outlook, that could have a meaningful impact on ...


August 4, 2015, 11:33 am, 1521684

The surge in SUV sales is due in part to relatively low gasoline prices, which ended July at about $2.70 per gallon nationwide.

via www.dispatch.com

Gas and cars are complementary goods. When the price of one falls, the demand for the other increases. In this case, the price of gas has ...


August 4, 2015, 11:33 am, 1521686

Ohio and other states that rely heavily on coal for electricity will have to make major changes in how they power their homes and businesses over the next 15 years under President Barack Obama’s unprecedented plan to drastically curb greenhouse-gas emissions.

Obama said on Monday that the average household would save ...


August 4, 2015, 11:33 am, 1521685

Ohio and other states that rely heavily on coal for electricity will have to make major changes in how they power their homes and businesses over the next 15 years under President Barack Obama’s unprecedented plan to drastically curb greenhouse-gas emissions.

Obama said on Monday that the average household would save ...


August 4, 2015, 11:03 am, 1521623
Notes: This CoreLogic House Price Index report is for June. The recent Case-Shiller index release was for May. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic Reports National Home Prices Rose by 6.5 Percent Year Over ...


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August 4, 2015, 10:34 am, 1521620

Paul Mason's claim that we're entering the post-capitalist era has met some some sneering from the right. But I wonder: might we not be reverting to a pre-capitalist era instead?

I mean this in three different senses.

First, we might be seeing ...


August 4, 2015, 10:04 am, 1521612
(Don Boudreaux)

… is from page 8 of my colleague Chris Coyne’s superb 2008 book, After War: The Political Economy of Exporting ...


August 4, 2015, 10:04 am, 1521611
(Don Boudreaux)

Tom Miller reflects on 50 years of Medicare.  A slice:

Aside from the basic numbers of budgetary imbalances and continuing fiscal pressures, ...


August 4, 2015, 10:04 am, 1521610

College enrollment has increased, but graduation rates remain discouragingly mediocre, especially among low-income students. Consequently, researchers and policymakers have focused on how students choose colleges that maximize their potential success, especially regarding “undermatching”—when high-achieving, low-income students enroll in colleges that are less selective than they are qualified to attend.

The focus ...


August 4, 2015, 10:04 am, 1521609

President Barack Obama has announced more regulation in the name of climate, requiring a 32 percent reduction in carbon emissions by 2030. Economic conservatives and those who believe in separation of powers are opposed. Given the role China has played in climate debates in the past, it is worth ...


August 4, 2015, 9:03 am, 1521539

The Wall Street Journal’s Daily Report on Global Central Banks for Tuesday, Aug. 4, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Signs of Stability in Core Inflation Should Comfort Fed Official Powell: U.S. Should ...


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August 4, 2015, 8:34 am, 1521536
The expected risk premium for the Global Market Index (GMI) ticked up in July, touching a two-month high. GMI — an unmanaged, market-value weighted mix of the major asset classes — is projected to earn an annualized 3.7% over the “risk-free” rate in the long term. (For details on the ...


August 4, 2015, 8:34 am, 1521535
Private nonfarm payrolls in the US are projected to increase by 227,000 (seasonally adjusted) in tomorrow’s July update of the ADP Employment Report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection is modestly below June’s increase. Two estimates based on recent surveys of ...


August 4, 2015, 8:04 am, 1521534
(August 4, 2015 07:04 AM, by Alberto Mingardi) I suspect that one of the most enduring legacies of the Greek crisis may be the making of Yanis Varoufakis into a global opinion leader. It is a curious phenomenon. Varoufakis was the leading Greek negotiator in a round of... (0 ...


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August 4, 2015, 8:04 am, 1521532

The Clinton e-mail scandal reached a new level of seriousness when the intelligence community inspector general found classified information from five intelligence agencies in e-mails housed on Clinton’s private server. It is against the law to remove classified information from government facilities and retain it after you have left office ...


August 4, 2015, 7:33 am, 1521527

Brian Yablonski, adjunct fellow of PERC:

Western orthodoxy suggests the white man’s irresistible drive for wealth led to the bison genocide. Reality, however, proved more complicated. Their near extinction was due to a host of factors ranging from adverse climate issues, introduction of the transcontinental ...


August 4, 2015, 7:33 am, 1521528

Yes, indeed, unless significant changes are made, you'll be entitled to wonderful health care benefits, but you just won't be able to get them. (Kinda like how rent control makes apartments "affordable" but . . . unobtainable.)

Related: "Absent Strong Action, Medicare Goes the Way of Greece".


August 4, 2015, 7:33 am, 1521525

It's enough to break an irony meter: virtually all the scapegoats of the Chapel Hill scandal--Chapel Hill, as proudly progressive a school as you'll find--are, or will be, minorities and women.

Related: a graphic presentation of some of the data, "Analysis of Student Athlete involvement in the ...


August 4, 2015, 7:33 am, 1521526

Alex Tabarrok elegantly refutes the attack on the "gig economy".

Some restaurants offer burgers without fries and a drink. These restaurants cater to low-income people who enjoy fries and drinks but can’t always afford them. To rectify this sad situation a presidential candidate proposesThe Happy Meal Act. ...


August 4, 2015, 7:33 am, 1521524

By an AP reporter, reprinted in the Washington Post, no less.

It’s getting more expensive to be an employer and small business owners say that’s making it harder for them to make money.

The health care law, minimum wage increases and paid sick leave laws in ...


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August 4, 2015, 6:34 am, 1521475
● US personal spending +0.4% and income +0.2% in June ● US auto sales surge 5.3% in July ● ISM: US manufacturing growth ticks down in July ● US construction spending rises by a sluggish 0.1% in June ● Gallup: US consumer spending flat in July


August 4, 2015, 5:33 am, 1521472
Every month, 3D printing possibilities get increasingly elaborate.

For example (with thanks to reader Tim Wallace for the links): The Goal of MX3D is to 3D print a steel bridge. Really.

With our robots that can “draw” steel structures in 3D, we will print a bridge ...


August 4, 2015, 5:33 am, 1521471



(p. 227) The fact that some people are led into a practice in pursuit of goals that are external to the practice-- money, fame, or what have you-- need pose no threat to the integrity of the practice itself. So long as those goals do not penetrate ...


August 4, 2015, 5:03 am, 1521441

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, Aug. 3, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Fed Doesn’t Demand Wage Growth Before Increasing Interest Rate Bullard: “In Good Shape” ...


August 4, 2015, 5:03 am, 1521439
Bloomberg News

Australia’s central bank left interest rates unchanged on Tuesday, as expected, while leaving the door open for a cut later in the year should the economy falter.

The ...


August 4, 2015, 5:03 am, 1521440
The Federal Reserve in Washington. SAMUEL CORUM/ANADOLU AGENCY/GETTY IMAGES

The latest inflation figures aren’t making the Federal Reserve’s job any easier.

Consumer-price growth has been running below the ...


August 4, 2015, 5:03 am, 1521438

In our last installment in our national dividend series, we were striving to turn our work in developing a consumption-based national dividend concept for measuring the economic well-being of typical Americans into a monthly economic indicator.

It turns out however that our source for ...


August 4, 2015, 4:44 am, 1521437
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August 4, 2015, 4:04 am, 1521436

What concrete changes would I make in schools? The idea that you need to take a whole class to learn some topic is absurd. Whatever you’ve learned is probably going to be obsolete. A class is to spur your interest, to expose you to a new role model, a new ...


August 4, 2015, 4:04 am, 1521435
(August 4, 2015 03:02 AM, by David Henderson) In a comment on a recent post of mine on worker safety, in which I highlighted the "Job Safety" entry by W. Kip Viscusi in The Concise Encyclopedia of Economics, MikeDC wrote: If you've got an impoverished and hungry subsistence... (1 ...


August 4, 2015, 4:04 am, 1521434

The failure of talks in Maui last weeks to reach final agreement on the Trans Pacific Partnership Agreement raises new, if slim, hope that this corporate wishlist may not be delivered after all. Friday was the last chance to get a deal that could be pushed through the


August 4, 2015, 3:03 am, 1521381
Bloomberg News

Australia’s central bank left interest rates unchanged on Tuesday, as expected, while leaving the door open for a cut later in the year should the economy falter.

The ...


August 4, 2015, 3:03 am, 1521380

August 4, 2015, 3:03 am, 1521379

Tim Duy:

Gearing Up For Employment Day, by Tim Duy: The big event this week is the employment report. Fed watchers will eagerly dive into the data, looking for signs that the labor market made "some" further improvement. "Some" improvement appears to be an important hurdle to clear before ...


August 4, 2015, 2:04 am, 1521377

1. Painter: Marko Čelebonović.  Plus lots of the art in the monasteries.

2. Performance art: Marina Abramović.  I still love this video of the staring game.

3. Author: Danilo Kiš, the Serbian Borges.  ...


August 4, 2015, 2:04 am, 1521376
(August 4, 2015 12:01 AM, by Bryan Caplan) [Warning: Season 4-5 Walking Dead spoilers]In zombie survival sensation The Walking Dead, the protagonists are captured by a community of hipster cannibals. The community is called Terminus; its members, Terminants. Their business model:1. Lure human survivors to their compound with... (1 ...


August 4, 2015, 2:04 am, 1521375

Congress fought a bruising legislative battle in order to ensure its right to review the Iran deal, officially known as the Joint Comprehensive Plan of Action. But like the dog that caught a car, Congress now faces the question of what to do with it. Should there be a straight ...


August 4, 2015, 12:44 am, 1521354

Finding employment in the formal sector in developing countries is difficult. Countries with an abundance of informal firms suffer from low aggregate productivity. This column suggests that as countries develop, more workers transition from the informal to the formal sector. A ten-year period of rapid growth in Vietnam displayed a ...


August 4, 2015, 12:44 am, 1521353

Italy’s productivity has been stagnant since the late 1990s. This column argues that public sector inefficiency could be partially responsible for the country’s low labour productivity. The evidence suggests that Italy could realise significant macroeconomic productivity gains if average public sector efficiency were to improve from its current faltering levels.