World war 2 caused a serious economic depression for several of the parties who found themselves on the losing side of the battle. Countless lives were lost, thousands of businesses were burned to the ground and millions of people all around the world felt the shock of this terrible catastrophe which shocked the world.They say war is profitable for those who win and terrible for those parties who do not. Italy was one of these parties, and their economy was extremely negatively affected from the second world war. Unemployment was extremely high and the nation’s economy found itself in a very bad situation. This paper will explore the negative effects of the second world war on the Italian economy and what made the Italian economy grow using the Solow Swan principles.

Firstly we will be examining the Solow model and going into the specifics of what makes this model function with all of the different components that help to show economic growth in any prosperous nation can come to be. This will be a very broad look into the model and will not pertain to any specifics of Italy’s economy. After that we will be analyzing the economy of Italy from the years 1945-1960 and see what the Italian government did to promote growth in their economy. This paper will be concluded with a summary of this analysis followed by a citations page which shows all of the places where data and information was obtained from.