The merger between Chrysler and Fiat is a large-scale industrial operation which brings together a multitude of distinct cultural, technological, geographical, and institutional contexts. The resulting global group continues to spark a strongly emotional debate concerning its future geography, especially as concerns its "Italian" status. The merger in fact offers many lessons about how a mature economy with high labour costs, such as Italy, can manage to nurture an industrial sector in the 21st century. This short book addresses a number of issues implicitly or explicitly raised in public debate and which seldom receive clear, exhaustive answers. The authors unveil the many false myths that cloak Italy's economic future in pessimism. How can big industries thrive without cutting wages? How can they improve quality without increasing costs? Why will it not be necessary to replace human resources with machines? And why and how can government play a meaningful role?

Giorgio Barba Navaretti teaches Economics at the University of Milan, is a Distinguished Visiting Faculty member at Sciences-Po in Paris and a columnist for the economic daily newspaper "Il Sole-24 Ore".

Gianmarco I.P. Ottaviano teaches Economics at the London School of Economics, is the Director of the Globalisation Programme at the Centre for Economic Performance, a research fellow at the Centre for Economic Policy Research, and a senior non-resident fellow at the Brussels-based economics think tank Bruegel.