is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

Reconstructing the Past: Revised Estimates of Italy’s Product, 1861-1913

Author(s):Fenoaltea, Stefano
Reviewer(s):Incerpi, Andrea

Published by EH.Net (February 2021)

Stefano Fenoaltea, Reconstructing the Past: Revised Estimates of Italy’s Product, 1861-1913. Torino: Fondazione Luigi Einaudi onlus, 2020. xvi + 329 pp. (online open-access), ISBN: 978-88-32139-02-0.

Reviewed for EH.Net by Andrea Incerpi, Department of Economics, Università degli Studi dell’Insubria


One year ago, Stefano Fenoaltea was refining his last remarkable work, Reconstructing the Past: Revised Estimates of Italy’s Product, 1861-1913. His untimely passing interrupted the heated debate started a year before with “Spleen” (Fenoaltea, 2019) and concluded on the pages of the Annals[1] while the editing of the book was coming to a close. The debate was centered on the essence of “Cliometrics” and its methodological foundations: economic theory, data, facts. These are the three tools used to file the oxymoron of a “scientific history,” the poorly-cultured definition hidden by the reputation of Econometrica. Their recovery is crucial to avoid the failure of the econometric school: as economists, as historians, as economic historians (Fenoaltea, 2019). The steps of this path, which lead to a Copernican approach to economic history, are the core of Fenoaltea’s book. Indeed, it is not a work of mere reconstruction of data but a Summa Theologiae of a fifty years of training for the author as an historian. Namely, an economic historian.

The first part of the book, which could be taken as a precious handbook for doctoral students, details the “art” of reconstructing historical data by renewing the failures marked in “Spleen” (Fenoaltea, 2019). Since economics is based on measurement, the good economic historian needs a method to measure in order to be a competent economist. Something that is generally snubbed by economists themselves in favor of the quality of data-processing. This method is a set of rules that Fenoaltea calls le regole dell’arte, with regard to the strict rules imposed by the medieval crafts guilds. Firstly, vet the data. This means verify the credibility of the data and “deconstruct it” investigating the “data-generating process” of the sources (p. 15). The second rule should be a natural impulse to a historian, as such without an objective limit: disaggregation. The assumptions behind each aggregate must be discussed both by vertical and horizontal disaggregation. It means, referring to the topic of the book, across “stage of production” (different time paths) and across “production sequences” (different goods and processes) respectively. The third rule concerns indexation and the general use of “known” series as proxies for the unknown ones. Here the strict rules recalled by the craft guilds leave room for an informal reminder, “a sad comment” (p. 29): thinking. Before indexing, while indexing, after indexing. Clearly, Fenoaltea’s belief in human logic does not match the belief in the intellectual profession of cliometricians. The fourth rule goes back to formal methodology. It concerns the use of a deflator to avoid the distortions of current prices. The deflator must be general and not activity-specific (p. 29). Given the impossibility to identify a standard for the real value of a good or a basket of goods, the general hint applies in a case-by-case basis that must be properly justified. Finally, the fifth rule is a warning about the standard constructs for the economy’s aggregate. Each of them has its proper genesis by circumstances and by the economic agenda. The adoption of GDP is the example of how a practical problem, the need for timely evidence on the economy to stabilize business cycles, can be solved by adopting a conventional measure. Thus, the artisan cliometrician must know what the standard measures quantify and what he wants to measure (p. 36). This is the only secular way to avoid the edicts of clergy economists and the misleading label of their standards of measure.

A focus on the way to treat maintenance activity in the production framework and a brief history of the evolution of Italy’s national accounts lead the way to the following second part of the book. As the title suggests, this part introduces the second generation estimates of Italy’s product related to the production side. This naming concerns the enforcement each generation of estimates has with the previous regole dell’arte. Within an idyllic world made of four generations of estimates, the last one is a pipe dream and the third one is still an ongoing work for the author. Thus, the second generation of estimates, which respects the first three rules, replaces the first generation, which comply with none of them. The production side, as admitted by Fenoaltea (p. 69), is not a deep complaint of Baffigi’s reconstruction (Baffigi, 2015). The agriculture estimates here include evidence of yearly harvest fluctuations and an allowance for on-farm improvements. The industry series update estimates for some industrial sectors: chemical, utilities, engineering, and leather. Revisions in services refer to differences in extrapolation obtained by Zamagni and Battilani (2000) and other minor refinements, such as per capita wages and the rental value of the premises.

The third part of the book refers to the estimates for the expenditure side. These series include several refinements following a basic guiding principle: estimating investments and consumptions by allocating to these the production-side estimates of value added (p. 93). The refinements include a revision of exports and imports and the calculation of an inventory-investments series that rejects the trend-cycle decomposition of aggregate investments proposed by the sesquicentennial corpus of revised national accounts (Toniolo, 2013). Thus, the expenditure side estimates point out two new factors compared to previous reconstructions: a revised downturn of private consumption and the reaffirmation of a long swing Kuznets-cycle for investments.

Finally, the last part of the book concerns the composition of fixed investments. Fenoaltea aims to better distinguish infrastructure investments from business investments. This is possible by disaggregating the data by destination. First of all, distinguishing investments in agriculture from investments in industry. By doing so, the partial disaggregation obtained identifies investments in structures and investments in machinery. Unfortunately, a more ambitious disaggregation of investments, by type (housing, public works, machinery and vehicles) and by destination (housing, services, public infrastructure) relies on weak first generation estimates only, which don’t make this step very satisfactory. The results of the decomposition confirm what Fenoaltea already argued in his previous works (Fenoaltea 1988, 2011): that is the long swing in infrastructure was due to the exogenous changes in the international capital market. Moreover, the investment in tools was similarly developed by the availability of finance (p. 107), mainly the retained earnings of the artisans themselves.

Fenoaltea’s book is the culmination of lifelong research spent reconstructing the past by sources and data. It started early in 1967 at the time of his PhD under the supervision of Alexander Gerschenkron[2], his mentor and target of endless criticism (note 25, p. 35). This methodological controversy narrowed the research of Fenoaltea to the Italian Liberal Age (1861-1913)[3] for a meticulous, and possibly never-ending, improvement of product estimates, as confirmed by his intent to go further in the study. This admirable effort shows probably a “diminishing return” (Baffigi, 2019) for each attempt of refinements. The differences between each stage of reconstruction grow thinner while the interpretation of the Italian Liberal economy is always rooted to the theoretical approach of Fenoaltea as a neoclassical economist.
The reference to Atropos is a sad coincidence, considering the passing of the author, which interrupted his long journey in search of the most accurate interpretations of Italian economic history. If economists are the clergy of a questionable religion, nevertheless Fenoaltea is a leading scholar for cliometricians. And his book is a secular Bible for the methodology of the discipline. A Bible to discuss and to reinterpret. It would not be the first time in history.

1. See Annals of the Fondazione Luigi Einaudi, 53 (2).
2. On the relationship with Gerschenkron see D. McCloskey (2020).
3. Fenoaltea masterfully contributed even to other topics such as the English open fields or slavery, mainly in the first part of his career as scholar.


Baffigi, A. (2015). Il PIL per la storia d’Italia. Istruzioni per l’uso. Collana storica della Banca d’Italia. Serie statistiche, vol. V (Venice: Marsilio).

Fenoaltea, S. (1988). International Resource Flows and Construction Movements in the Atlantic Economy: The Kuznets Cycle in Italy, 1861–1913. Journal of Economic History 48, 605–638.

Fenoaltea, S. (2011). The Reinterpretation of Italian Economic History: From Unification to the Great War (New York: Cambridge University Press).

Fenoaltea, S. (2019). Spleen: The Failures of the Cliometric School. Annals of the Fondazione Luigi Einaudi 53/2, 5−23.

McCloskey, D. (2020), “Stefano Fenoaltea (1943-2020), PSL Quarterly Review, 73 (295): 393-394.

Rey, G. M., ed. (2000). I conti economici dell’Italia. 3°°. Il valore aggiunto per gli anni 1891, 1938, 1951. Collana storica della Banca d’Italia. Serie statistiche, vol. I (Rome-Bari: Laterza).

Toniolo, G., ed. (2013). The Oxford Handbook of the Italian Economy since Unification (New York: Oxford University Press).


Andrea Incerpi is research fellow in Economic History at Università degli Studi dell’Insubria. Recent publications include “Finance and Development in Italy, 1870-1913” (with Barbara Pistoresi and Alberto Rinaldi), International Journal of Economics and Finance (2020) and “Balancing the Current Account: Remittances and Tourism in Italy, 1861-1914,” Rivista di Storia Economica (2019).

Copyright (c) 2021 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (February 2021). All EH.Net reviews are archived at

Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):Europe
Time Period(s):19th Century
20th Century: Pre WWII