COMPETITION, DEVELOPMENT, INFLATION - THE CASE OF SERVICES

The service sector in Italy is a source of inflation. A policy that in tends to bring do-tic inflation into line with international inflation , must co- to terms with the services; that is, identify what are the conditions that permit operators In those sectors to manipulate prices and what are the interventions of the authorities that could remove o r at least ease those conditions. In this article we do not provide a full answer to these questions. The aim of the work is, in the first p lace, to provide empirical evidence in support of the thesis that the tertiary sectors create inflation rather than dampen it. In the second place, we set down an interpretation of the causes that push service prices upwards. The interpretation is of both a microeconomic and a sy stemic nature. Al the microeconomic level what counts are the forms of the market, prevalently non competitive, that characterize the variou s tertiary sectors. At the systemic or macroeconomic level what are im portant are the inter-relationships that have been established in Ital y over the last ten years between the decline in the industrialized ba se and the expansion of the services: the services increased the effec ts of the de-industrialization on the use of labor. A revival of compe tition and re-industrialization would seem then to be two complementar y lines of action that the public powers should pursue to reduce the i nflationary role exercised by the service sector.