The authors thank the editor, associate editor, and two anonymous referees for comments and guidance; seminar and conference participants at Bank of France, Bank of Italy, Center for Studies in Economics and Finance-University of Naples Federico II, Luiss University, Michigan State University, Monash University, University of Essex, University of Exeter, University of Rome I, OFCE (Observatoire Francais des Conjonctures Economiques)-Sciences Po, World Bank, and Prato Workshop on Sustainable Development for comments and conversations; and Stefano De Santis for help with using the ISTAT databases. All remaining errors are ours.