ABSTRACT
This chapter presents an analysis of the most important aspects of the Italian economy in the midst of the current economic crisis and discusses the country's past and current approach to industrial policy (IP). The Italian economy can be characterised by two anomalies that have played an important role in shaping the country's current economic situation. The first is the trade specialisation pattern. The second is the size distribution of Italian firms. IP has a long history in Italy that dates back at least to the "economic miracle" period. After World War II, the Italian economy was still largely agricultural and characterised by high unemployment and large regional disparities The future evolution of IP in Italy will depend not only on the domestic political and economic equilibrium but also on the behaviour of a number of other actors, including the European Commission (EC), the WTO and the new emerging economies.
