Friday, December 12, 2008

Italy is so Cheesy!

. Friday, December 12, 2008

From Mankiw

The WSJ reports:
The world is bailing out banks and car companies. Italy is coming to the rescue of parmigiano cheese.

In an effort to help producers of the cheese commonly grated over spaghetti, fettuccine and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity.

Though demand for parmigiano is strong in Italy and abroad, producers have been struggling for years to make money, putting the future of Italy's favorite cheese at risk.
An economist might suggest letting a few producers fail, so supply shrinks, prices rises, and the remaining producers become more profitable. In fact, that same logic might apply to some other industries as well.


Christopher Dittmeier said...

Parmigiano, along with prosciutto, is central to the economy of that entire region of Italy. If you can imagine the shock of the auto industry's failure on the labor market in Detroit, there is a similar consequence awaiting the failure of the cheese and ham producers in Parma.

Thomas Oatley said...

And if whoever wrote this piece for the WSJ believes that Parmagiano Reggiano is simply "cheese commonly grated over spaghetti, fettuccine and other pastas" they have no idea what they are talking about.

p.s. doesn't the US government buy and distribute to foodbanks American cheese?

Anonymous said...

If you want to apply US American economics to the Italian economy you will always fail in your analysis.

This is because your comment is out of context, so try to understand the Italian economy and then perhaps you will be able to make a forecast.

As an Italian economist living the US I do not understand why US economist do not know what culture means and the different foundation of each type of economics for each country/culture.

Kindred Winecoff said...

Anon -

are you suggesting that something about Italy renders standard economic models useless? or are you saying that for cultural reasons Italians are perfectly willing to accept economic distortions in order to keep certain industries alive?

either way, i don't see how an American couldn't understand.

Anonymous said...

Hey, Italian guy,

Capisco la economia nazionale de Italia. Ma los stessos modellos può essere abituato a descrivere las economias del Stati Uniti e Italia.

Your comment made about as much sense as my Italian, so I guess that makes us even. What Christopher and Prof. Oatley were talking about were the parallels between two extremely important industries to their respective countries.
The failure of the US auto industry would have broad consequences due to the number of workers/businesses indirectly/directly tied to the big 3 auto firms.
Likewise, the failure of the ham and cheese industries in Italy would have drastic consequences for the country due to the sheer number of workers somehow involved in the industries.

Maybe? Yeah? No? Well then vacagare, brutta.

Italy is so Cheesy!




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