Sector Potentiality and Sources of Growth. An Analysis of Structural Changes in Italy in the Nineties

The objective of this article is to analyse structural changes which occurred in Italy in the period 1992-2000. The analysis is carried out within the I-O framework by the use of multipliers, I-O elasticities, structural decomposition and causative approaches. These tools are used to assess over time the degree of sector interrelationships, the potentiality of sectors in fostering economic growth, the sources of change in the economy and contribution of sectors to growth. In particular, the structural decomposition approach is based on the use of a revised version of RAS finalised to isolate productivity and substitution effects affecting technology changes. From the analysis, there emerges that, in the nineties, the process of development has led to reinforcement of sectors more related to service supply and to an increasing reduction of the importance of agriculture and manufacturing sectors. Moreover, Italy has been interested by structural changes mainly due to the variation of the level of final demand, in particular of consumption, rather than technological changes. Finally, the Italian economy, in line with the general tendency of other industrialised countries, has been involved by the process of rising diffusion and importance of computer and communication technologies throughout the whole economy.