Garegnani, Ackley and the years of high theory at Svimez

Abstract

In the late 1950s, Svimez was an influential research centre on Italian economic and regional policies. It was advised and visited by top international development experts and by leading Italian economists. Pierangelo Garegnani, fresh from his seminal PhD thesis on capital theory at Cambridge, published a report for Svimez in 1962 on the relevance of Keynes’s theory for economies at an intermediate stage of development, such as Italy. Gardner Ackley published a similar report for Svimez in 1963. The theoretical parts of Garegnani’s report were published in English in 1978–79 and 2015. In a final applied section, not published yet, Garegnani estimates that a fuller utilization of productive capacity would have allowed for the creation of 550,000 additional jobs without balance-of-payments problems. Garegnani also raises several theoretical issues. Ackley’s report is an econometric exploration of the Italian ‘economic miracle’ based on a demand-led growth super-multiplier model – an approach rediscovered by some Sraffian economists and recently taken up by Marc Lavoie. The chapter compares the two reports.