We analyse the developments of investment and investment financing in Italy since 1995, based on data from national accounts and the flow of funds.
The exceptional fall in investment after the global financial crisis in 2007 concerned all institutional sectors and asset categories. However, appropriately deflated data highlight the more intense fall of household capital expenditure. Consistently, on the asset side, construction was one of the most hard-hit capital goods; ICT and intangible investment instead weathered the double recession better. Focusing on investment financing, the eruption of the crisis caused a major contraction in the availability of external finance for non-financial corporations and households.
Long-term loans to non-financial corporations became more important, crowding out their short-term counterparts. Also the weight of debt securities increased significantly, especially after 2008.
Published in 2022 in: Journal of Forecasting, v. 41, 3, pp. 491-513.
