The disappointing growth performance of the Italian economy in the more recent period is analysed here with a stress on the medium-term evolution in the relationship between capital per worker and output per worker for the aggregate business sector of the economy. A drop in the elasticity of value added per worker with respect to capital per worker emerges, from graphical evidence and regression exercises. The Italian case is compared with more favourable performances of other countries. A simple model of interaction between supply side and demand side parameters, is proposed for an attempt at an interpretation of the relevant factors behind this experience. The Italian economy appears in fact to have suffered a negative productivity shock since the 1980's; permissive conditions on the demand side appear to have counterbalanced its impact on overall growth until early 1990's. In the more recent years, the conditions for stability within the EMU have no longer allowed such compensation, and the competitive and structural weaknesses of the Italian productive system have revealed their full impact.