Why? What caused the boon at the time?

I mean it's still the 8th biggest economy in the world, so not exactly small. People always find this very surprising giving all the issues the country has but the north has many centuries of high-end manufacturing history. In particular very expensive, very specialised machines used in manufacturing of everything else.

really good pasta harvest

The industrial sector was riding the long wave of public investment started with the Marshall Plan. The Socialist Party was brought into government in the early 1960s (to lock out the larger Communist Party), and ensured the robust program of public funding for industrial efforts (and civil servants) would continue and expand. This created a feedback loop whereby public debt would grow, forcing currency devaluation, which boosted exports, which made the system look so successful that further increasing public debt was seen as acceptable - and so on and so forth. In addition, a few underdeveloped regions exploited the deflated exchange rates to bootstrap cheap manufacturing, particularly in the North-East, right about that time.

The game came crashing down in the early '90s, when credit markets pulled the plug as the debt/gdp ratio hit triple digits and looked out of control. The only way to re-establish credibility was to dramatically cut spending and increase taxes (infamously, one year the government made an overnight withdrawal from all private bank accounts over a certain balance, completely unannounced!) and hook Italian fortunes to the European integration effort, piggybacking on the almighty Deutschemark. This stabilised things but effectively ended the boom times for good, since we cannot compete at the cheap end anymore.

Still, the country continues to be a solid G8 member and produces a lot of excellent fare - the world queues up to buy Italian brands, from automotive to food, and most of them are absolutely worth the money. Among other things, chances are that your sunglasses and eyeglasses are made in Italy, even if you don't know it.