“The knife grinder has arrived!” Size, exports and growth
(… and it seemed to you? …)
Marco left a new comment on your post " GDP and the decline of the euro (lebbasi) ":
And I thought that the greatest Italian growth was due to the greatest fall with covid. We'll see if it continues at this rate, but I'm afraid not.
Are the agile SMEs to which we owe this miraculous growth the same ones of the last 30-odd years of decline? Are they perhaps the same ones who don't make an investment in ICT but have to pay for it because they don't know what it is and who on average have very limited managerial skills? Are they the ones who pay low wages because they have low productivity? We could go on….
To conclude, what is the point of having globalization if you cannot then export to foreign markets? It is well known that exporting companies are large.
Published by Marco on Goofynomics on Jan 8, 2023, 7:50 pm
In a previous post we mentioned the Janinists, and our friend Marco offers himself as an example for didactic purposes. Let's see how many bullshit controversial statements he's lined up, and then let's go to sleep worried. They aren't bad, they don't do it on purpose, but there are many of them, they are everywhere, and they never find anyone to counter them, so the Giannini, like the poor things , are dangerous. There is the risk that politics, and above all those organs of political orientation which are the high courts, will take the slightly out of fashion vision of the world offered by them as good. Austerity has been the rotten fruit of this cultural hegemony. We would like to avoid falling back again.
Italy has grown more because it has fallen more
First bullshit controversial statement. Just look at this graph:
The data comes from this table from the latest OECD Economic Outlook:
converted to 100-based index in 2019.
If going into a deeper recession was enough to grow more, then Spain should have caught up and overtaken us. Instead we, who had a comparatively less severe recession, have recovered more than you. OECD data shows that in the two-year recovery period (2021-2022) ours was the highest average growth (5.2%), followed by that of Spain (5.1%), France (4.7%) and Germany ( 2.2%). We also recall that for 2022 we have estimates that will most likely be revised upwards in the case of our country. Let me add that we achieved this performance with a relatively low level of inflation (so far):
Germany and Spain have seen a much faster evolution of prices, despite the fact that Spain is stuffed with LNG , and therefore somehow less affected by the supply constraints posed by the energy crisis. Only France does better than us, which instead is filled with nuclear power plants (hopefully!).
Productivity depends on the size of the company
Yes, I know: you meant productivity.
You haven't been very productive.
You see, now because of you I'm clogged with obscene spam because I'm curious to go and see how much a phalloplasty costs. Yes, because this obsession with having it big, the company, in my opinion is Freudian, a bit like the obsession with the hard coin whose exchange rate soars. Perhaps more women in power would actually be needed, although, logically speaking, I don't know if this would alleviate the problem…
Here with the story that the productivity of companies depends on their size and therefore "dwarfism" is the cause of decline (moreover, dwarfs are known for their virtues ), we closed many years ago , we tend to consider it bullshit a controversial argument , and the result of our reflections (which are then closely linked to those of Smith, mentioned two posts ago ), was subjected to peer review and published in a journal three years later. In our opinion, the decline of the Italian economy depends on other factors, we think a little more like Smith, Kaldor, and Thirlwall, than like the many Giannini hegemonic in the media, but if you don't agree with us, in case you don't you are interested in phalloplasty (as I believe and hope) I suggest a second option: take pen and paper, write an article to refute me, send it to a more important journal than the International Review of Applied Economics (I suggest the American Economic Review ) and come back to visit us. We are always curious to learn. We are less interested in cliches (we are laymen on dimensions).
The exporting companies are big
Aridanga! Again with this story of dimensions…
But before going into the merits of this topic, I would sincerely ask you to explain to me the meaning of this sibylline sentence (or, if you prefer, sibylline, so it will seem more productive of thought):
what is the point of having globalization if you cannot then export to foreign markets?
I really don't understand the meaning of it. Here we think, in many, that globalization has gone too far, it has entered the phase of diminishing returns, the phase in which it creates more problems than it solves, therefore a first reflection is that, precisely, having all this globalization does not serve us . Then, who said that "you can't export to foreign markets"? If you want, and buy from abroad, why not? The point that has always been underestimated (by others, not by us) is that those who export goods import problems . What do I mean? Simple: if your development model is mercantilist, German-style, i.e. entirely based on the demand of others, your economy will be very sensitive to any geopolitical shock that closes foreign markets (at which point you will regret not having fueled domestic demand). This is the reasoning that we have been doing here for some time, and that now others are starting to do, at their leisure.
As for your obsession with size, what do you want me to tell you? The evidence is not as solid as your certainties. In the literature there is no shortage of studies according to which the idea that the intensity of exports depends on the size of the company is a controversial bullshit : already in 1992 Bonaccorsi refuted this assertion in the case of Italy, in 2001 Wagner demonstrated that the majority of studies on the subject were biased due to the nature of the variables used and once this bias was taken into account size in many sectors did not appear to be an issue, a more recent study by yours finds a relationship between size and exports in West Germany but not in Germany East, etc. etc. etc. But we can now do without these studies: the knife grinder arrived and told us that export rhymes with size. Better this way, always better to read a letter from a friend than a boring paper full of numbers.
However, with the utmost respect for your cousin , who I think is the inspiration for your brilliant analyses, I would like to point out that ICE sees it in a slightly different way. In its latest report , Italy in the international economy tells us that:
51.2% of Italian exports are generated by SMEs, and the percentage of exports from micro-enterprises is absolutely in line with that of Germany and France. As the performance of our exports is not disappointing:
(here Spain does marginally better than us, but before it had done much worse, while Germany is running aground), I don't see how the fact that more than half of our exports come from SMEs can be seen as an indicator of a fragility … which is not there!
Conclusions
Dear and esteemed Marco, as you can see, it's not me who is afraid to publish your comments: it is you who should be afraid that they will be published. You are new to these parts. We are a small village of tens of thousands of people, and every now and then, as is done in villages, we affectionately amuse ourselves with those who don't get there, but only if they do it arrogantly, and always in an argumentative, constructive, and pedagogical way.
In Rome they say: come me sòni, te sing.
(… ah, anyway if you find written on the mirror "Welcome to AIDS!" it wasn't us. Here we are secular, tolerant, and above all prudent. You should be inspired by at least the last of our virtues …)
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/01/e-arrivato-larrotino-dimensioni.html on Sun, 08 Jan 2023 21:31:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.