The paper provides an overview of the results of a recent research project by the Bank of Italy on "Local development, urban economies and aggregate growth".
The paper documents the interplay between historical origins, congestion costs, and agglomeration benefits in shaping the Italian urban system. It shows that urban agglomeration externalities (on wages, productivity, or innovation) tend to be smaller in Italy than in other developed countries; it also shows that the costs of congestion are relatively high and that housing costs discourage mobility. These features might have negative consequences on the country's ability to grow.
Published in 2019 in: Italian Economic Journal / Rivista italiana degli economisti, v. 5, 2, pp. 191-204
