If global trade and global value chains shrink, so will productivity. Inward-oriented policies are not the right reaction to political discontent. Protectionism is the wrong response to collateral damage of free trade, the exclusion of many from its benefits. Nostalgia for the past does not eliminate inequality; rather, it aggravates it. Italian companies But let me turn to Italy.
Between 2008 and 2013 the Italian economy suffered the worst slump of its history: GDP went down by 9 percentage points, slightly more than household spending, while investment fell by 30 points, industrial production by almost 25 and employment by 4. The double-dip recession was far more severe in Italy than in the rest of the euro area.