Output, investment and productivity: the Italian North–South regional divide from a Kaldor–Verdoorn approach

This paper elaborates on the Italian North–South divide by endorsing a Kaldor–Verdoorn perspective. To assess endogenous relationship between labour productivity, capital accumulation and output growth, panel structural vector autoregressive (P-SVAR) modelling is applied to 1980–2017 data macro-regions areas. Findings show that territorial disparities exist in both Verdoorn effects throughout country. Output growth has larger effect productivity Centre–North, while investment stronger South. That stresses relevance of public effort stimulating – therefore, especially economically depressed