An Analysis of the Reasons for the Prosperity and Development of Italian Economy in 1950s and Early 1960s

Abstract

Europe was in ruins after the end of World War II in 1945. Italy, on the other hand, pulled itself out of the hole and achieved the pinnacle of its economic development in just two decades, which is known as an economic miracle. The purpose of this article is to explore the reasons why Italy was able to turn the situation around and make its economy flourish when almost all European countries were in development difficulties after the second World War. Based on the analysis of the economic development in the 1950s and early 1960s, combined with the economic development measures adopted at that time, it is concluded that Italy's success depends on two factors: internal and external. The internal factor refers to prioritising the growth of domestic small and medium-sized businesses. The development of the real economy created a sound basis for Italy's future economic take-off throughout the economic winter. The external factor was aid from the Marshall Plan. With the aid money, Italy was almost restored to its pre-war status for a short time. It was the combination of both internal and external factors that produced Italy's economic golden age.