ABSTRACT
The increase in time of per capita income, characteristic of Kuznets' modern economic growth, is accompanied by considerable changes in the composition of demand. Until 1914 modern economic growth was characterized by growing international specialization and by a tendency towards market integration both of goods and of factors of production. This chapter deals with foreign demand and considers briefly the whole issue of Italy's balance of payments. The ratio of investment to national income, cyclically highly unstable, in the long run seemed to follow the path of Italian economic growth and was characterized by a trend acceleration from the mid-1890s onward. Savings follow more or less the same pattern, however it should be noted that often domestic savings are not sufficient, especially in the early stages of modern economic growth, to finance investment demand completely. The essential stability of the share of public consumption in gross domestic product is mirrored in the similar pattern of public expenditure.
