ECONOMIC DEVELOPMENT OF ITALY IN THE XXI CENTURY

Abstract

This article presents a comprehensive study of macroeconomic indicators that shape the trajectory of the Italian economy in the XXI century. In an effort to understand the complex interrelationships between key factors, the purpose of the study is to assess the aggregate impact of key indicators, including the poverty index, economic openness, foreign direct investment and persistent unemployment, on the Italian economic landscape. In particular, the research sheds light on the government's proactive measures to tackle the complex issue of unemployment, underlining the urgency of addressing this critical problem. The paper also examines the dynamics of Italy's balance of payments since its integration into the euro area, highlighting the country's key role in global markets. Italy's status as a major producer in sectors ranging from clothing and automobiles to renowned products such as wine and cheese underlines its importance as an attractive destination for international investment. This analysis aims to provide a detailed understanding of Italy's integration into the global economy and the consequences for its economic performance. The methodology applied in this study uses rigorous correlation and regression analysis. To address potential multicollinearity issues, three distinct models are proposed. These models offer a robust framework for economic interpretation by highlighting the complex interrelationships between different indicators. The study emphasises the key role of such indicators as public spending, economic openness, poverty index, labour force dynamics and gross fixed capital formation in shaping Italy's economic trajectory. The results of the analysis underline the importance of taking these indicators into account when developing future economic development plans for Italy. The key factors identified, including public expenditure, economic openness, the poverty index, labour force dynamics and gross fixed capital formation, have a significant impact on a country's gross domestic product (GDP) and GDP per capita. In terms of practical implementation, the study suggests that policymakers and stakeholders should prioritise these indicators when designing robust and sustainable economic strategies. Such practical implications of the research findings are necessary to guide Italy's economic development and ensure its continued leadership in a dynamic global market. The originality of this study lies in its holistic approach, which offers a comprehensive study of various macroeconomic factors. The proposed models significantly deepen the understanding of Italy's economic dynamics, making a valuable contribution to the academic discourse on this topic.