Giornale degli Economisti

We analyse with an event study approach the stock market reaction to Lehman Brothers' filing for chapter 11. Our inquiry on abnormal returns of about 2,700 stocks around the event date documents that RiskMetrics-KLD indexes capture factors affecting investors' reaction to the shock. We also find that investors rationally attribute more value to the information on each rating domain than to affiliation/non-affiliation to the FTSE KLD 400 Social Index. Investors seem to discover, after the event, that KLD ratings provide original information which is not captured by traditional financial rating indicators.

Using a large industrial panel, we show that the size distribution of Italian manufacturing firms can be well approximated by a two-parameter generalized Pareto distribution (GPD); the fitting is particularly good for medium-large companies. This evidence seems to hold using different proxies of size: number of employees, revenues, fixed assets, total costs and debts. The choice of different measures of size is justified by the desire of presenting robust results, but also by the idea that one single optimal measure of size probably does not exist, and it is thus better to combine different points of view. We believe that such an approach represents a clear novelty of our work. The presence of a GPD in the size distribution of Italian firms suggests interesting implications of industrial economics, as discussed in the paper. In more details, we find that, for the entire time window considered, the parameter ξ of the GPD is persistently in the interval [0.5,1], indicating fat tails - consistently with the so-called Pareto law of industrial dynamics, but also pointing out a certain stability in the shape of the size distribution of Italian firms. For what concerns growth rates, the Laplace distribution provides a good fit, ruling out Gibrat’s law of proportionate effects from the patterns of growth of Italian companies. In the paper we discuss the economic implications of such a finding.

A pseudo-panel of Italian single households is used to test for rational addiction in alcohol consumption. These monthly consumption data raise problems of measurement errors and unobservable heterogeneity. To deal with the zeros in the dependent variable we adopt a specification based on infrequency of purchase. GMM estimators are used to deal with errors in variables and unobserved heterogeneity. There is evidence that alcohol consumers are actually forward-looking. Past consumption is also significant in explaining current consumption thus detecting the addictive nature of alcohol. Discount rates, the strength of addiction, short and long run price and income elasticities are significant and in line with the theoretical predictions. These results and the inclusion of a number of demographic and geographic characters deliver valuable information for public policy purposes and suggest significant differences driven by individual heterogeneity.

The paper introduces indices to measure the concepts of internal and employee equity in social psychology. The panel data of the Nippon Professional Baseball League for the period 1996-2008 and quantile regression are employed to examine the relationships between inequities induced by salary dispersions and team performance. The findings support that payroll has a positive effect on team performance, and it is stronger for winners and losers than average teams. Moreover, salary inequality based on employee equity for hitters has a significantly positive effect on team performance. The implication for team managers is that tournament-like compensation is suitable for hitters.

This paper provides laboratory evidence on the efficiency-enhancing properties of the Tiebout model as a decentralized system of public goods provision. Tiebout (1956) shows that if a sufficient number of local communities exist to accommodate different types of preferences, individuals sort themselves in a way that provides an efficient allocation of public goods and taxes. Our experiment aims to disentangle the effect of voting participation from other factors and is composed of two treatments. In the non-participation treatment, local public good provision is chosen by only one subject, while other members of the community can only stay in or move to another community. In the participation treatment, all the community members have the right to vote as well as to move to another community and collective decisions are taken by majority rule. Our findings show that social welfare is greater in the participation than in the non-participation treatment. We conclude that voting with one‟s feet increases efficiency if all the community members vote and that the influence of voting participation on the allocation of local public goods should be taken into account to assess the viability of the Tiebout model.

We investigate the public-private pay gap in Italy in the period 1998-2008. Under random sampling we estimate an average wage dierential in favour of public sector workers of about 14% for women and 4% for men, lower at the high tail of the wage distribution and in the Northern regions. The dierential increases when also unobservable motivations that may induce workers to prefer employment in the public sector are considered, in particular above the median of the distribution, therefore suggesting that extra-motives may play an important role overall at higher wage levels.

In this paper we propose a denition of fairness in education which is based on the theory of equality of opportunity developed in the last decades in the philosophical and economic literature (Roemer,1998; Fleurbaey, 2008), we derive opportunity inequality measures based on such conceptual framework, and we use these measures to evaluate the 1999 reform of the Italian university system (the so called \3+2" reform). Looking at 1995-2004 college graduates data our estimates show an improvement in the equality of opportunity in the access to university. However, the aggregated data available for the 2005-2008 suggest that such a positive eect may vanish in the medium run.

One of the measure of the effectiveness of fiscal rules is their level of compliance, especially when sub-national fiscal rules are considered. However, the compliance level can be a misleading proxy for the impact of the rules, given the possibilities that fiscal rules trigger window dressing and creative finance. We use evidence from the Italian municipalities budgets, to test the presence of creative accounting as the consequence of subnational fiscal rules, in a context in which the levels of compliance are generally very high but the status of local finance is very poor. A quasi experimental approach is allowed by the special regulation of the Italian Internal Stability Pact between 1999 and 2004.

In this paper we study whether an IRPEF reform aimed at reducing the tax burden on labour income - via the enlargement of the tax base due to the inclusion of imputed rent for owner-occupied dwellings - can achieve a political majority. We use a micro-simulation model designed precisely to examine housing taxation in Italy, and compare the tax burden before and after the reform under three alternative scenarios, all designed in order to keep current revenues at a constant level. Our main result is that, in terms of all three scenarios, the share of the winners is consistent - between 46 and 48 percent - while the share of the losers is around one third of all taxpayers. The percentage of winners is further increased when considering households instead of individual taxpayers, at about 50 percent; however, the share of losers is also substantial - in this case about 40 percent. Overall, then, a political majority supporting the change is presumably obtainable. Finally, it can be seen that reducing the tax wedge on labour income while contemporaneously taxing more housing, would generate a redistribution towards younger generations.

In this paper we use the EU-SILC data 2005 to estimate the private rates of return to higher education in 22 European countries. By implementing a Heckman selection model and an instrumental variables estimator we study the effects of schooling on employment and wages and compare them across European countries. Our results show a great deal of heterogeneity in the rate-of-return estimates across countries. Although a clear grouping of countries does not emerges, we observe that the returns to tertiary education appear generally high for Eastern countries and low for Nordic countries whereas the Mediterranean and Continental European countries mostly exhibit an intermediate position.

The Bologna process inspired the Italian 3+2 reform of the university system which constitutes a big increase in the supply of college graduates. This paper is a preliminary attempt to identify the e¤ects of the reform on (i) the relative probability (relative to non-graduates) of employment of college graduates in the age range 25–34; (ii) their quality of employment measured with the relative probability of being employed with a temporary contract; (iii) the college wage premium. Using administrative data to identify the gradual introduction of the reform in di¤erent universities, we …nd that the reform increases signi…cantly the relative employment of graduates except for women in the South where the rapid increase of female post-reform graduates has not been absorbed by the weak labour market. Finally we …nd that post-reform college graduates have a signi…cantly lower college premium with respect to high school graduates than pre-reform graduates.

This paper characterizes variations in the expected employment of university graduates after a reform of the Italian University system that caused an increase in tertiary education attendance and a reduction in dropout rates, modifying the length of degrees and course contents. In a survey of employers’ hiring intentions which elicits information about occupations open to university graduates, it finds that employers mainly substituted less educated workers with more educated ones within clerical and technical occupations.

Information regarding skills that foster employability of University graduates is of particular interest in Italy, where youth unemployment remains high in spite of an increase of tertiary education enrolment. This paper analyzes a survey of human resource managers’ preferred job-seeker characteristics. A conjoint analysis of hypothetical new-graduated job seeker ratings indicates that English language skills, final degree grade, and work experience are the most important attributes of candidate profiles. Age reduces the attractiveness of a candidate, while the difference in preferences between laurea triennale and laurea magistrale is so small as to be offset by two years of work experience. Interactions between firm and vacancy characteristics indicate that gender preferences depend on features of specific jobs.

We study the role of human capital in the restructuring process of the Italian economy. Italy displays a large and persistent gap in the share of college graduates in the population (12% in 2007) with respect to the rest of Europe (24%). The introduction of the 3+2 reform has significantly increased the supply of college graduates, mostly absorbed by the private sector. Firm level evidence indicates that the growth in graduate employment is due almost entirely to a “within” firm component rather than to a shift of the productive structure from low to high human capital activities. We also find that a higher share of college graduates at the local level is positively associated with restructuring activities and with productivity growth. This indicates that increasing the educational attainments of the workforce is key to overcome the phase of stagnating productivity growth that characterizes the Italian economy since the mid nineties.

The paper introduces mobility costs and non-competitive wage setting into the spatial equilibrium model to analyse regional differences in rents, wages, unemployment and populations. It also considers the impact of policies, such as transfer payments to households and subsidies to firms, and illustrates a numerical exercise to discuss their welfare implications.

A significant strand of the recent literature endorses the thesis that “excessive” regulation (or a heavy administrative burden on firms) damages competition and growth. The Italian system has a poor ranking both in anti-competitive regulations (see the OECD product market regulations indicators) and in bureaucratic burdens (80th in “Doing Business” in 2011), despite improvements in the former over the last 10 years. But Italy’s position is the result of a combination of possibly very different contexts, so it is useful to evaluate the differences between Italian regions with reference to some indicators that are likely to take different values (i.e. those that do not depend simply on national laws).

The aim of this paper is to measure this variance with reference to the costs and the length of the various administrative procedures. Some suggestions on the potential impact of these inefficiencies and possible causes of the differences are discussed.

Students’ competencies are influenced by a host of factors, including individual school’s effectiveness. Measuring this contribution is extremely difficult. One way of circumventing the problem is by focusing on changes in students’ competencies, i.e. value-added measures. Using the results of an INVALSI survey on high schools, this paper implements these measures for Italy, in an attempt to identify a general pattern of value-added among schools. Purging the sample from measurement errors – which require the exclusion of schools with too few students tested – and taking into account the selection bias implied by the non-compulsory nature of the survey, we find that the positive gap in favour of general programs (licei) when looking at the level of competencies tends to vanish (in math and science) when focusing on value-added measures. By contrast, in the same subjects schools located in the Southern regions are characterized not only by a lower starting level of competencies but also by a lower value-added. For math at least, there is also a general tendency for teachers’ turnover to have a negative effect on students’ improvements.

We provide an estimate of the burden that current policies impose to present and future generations of Italians. Based on our computations, we argue that current fiscal policies are neither financially sustainable nor fair to future generations, due to the generous treatment awarded to past and currently-living cohorts. We discuss some policy options which could potentially restore sustainability while at the same time improving intergenerational justice. Our analysis is also meant to contribute to an assessment of Italian fiscal policy in the last decade. In particular, confronting our findings with those of previous studies, we argue that in the last ten years neither sustainability nor fairness have improved.

This paper examines the impact on the Italian productive system of the recent and severe (the deepest since the Second World War) economic and financial crisis. The picture offered by aggregate national accounts data is supplemented with information at firm level drawn from the Bank of Italy’s annual Survey of Industrial and Service Firms (also known as the Invind Survey) and with the accounts of in-depth interviews that a group of Bank of Italy economists conducted between the end of April and the first ten days of May 2009 with some 70 top managers and executives of Italian firms. The main motivation of this analysis lies in the conviction that the recovery of the Italian economy will depend, more than in the past, on its ability to respond to the heightened competitive pressure in a flexible and innovative way. The rich and heterogeneous set of data and observations collected in this work make it possible, by distinguishing firms by size, sector and propensity to export, to study a wide variety of questions that help sketching a comprehensive picture of the effects of the crisis on the Italian productive system, a crisis that caught it in a phase of deep-going albeit partial restructuring that was beginning to bear fruit. While all firms were heavily hit by the recession those that in the past started to innovate proved more resilient and their experience might point to the right strategy to successfully ri-emerge from the current critical situation.

The aim of this paper is to assess the relation between individual skills and labour market performance by immigrants residing in Lombardy. We exploit a rich dataset collected by the NGO ISMU, which includes information on individual characteristics and the legal status of each immigrant. Our results show that returns on schooling are positive, although much lower than the one estimated for native Italians. This result is robust to a number of specifications and tests; in particular, it is not influenced by a possible self-selection in the labour supply or by signalling problems to local employers.

Based on a VAR model, which allows to take into account direct and indirect links between the variables, this paper shows that public capital positively and persistently affects GDP in Italy and in its main geographic areas. This result is also attributable to a strong stimulus exerted on private capital (crowding in). A higher elasticity of GDP to public capital is estimated for the South, whereas marginal productivity turns out to be higher in the Centre-North. This suggests that public capital has a lower economic return in the South, bearing out the existence of a potential conflict between equity and efficiency goals.

In this paper we analyse a hypothetical welfare reform that would introduce a Guaranteed Minimum Income (GMI) in Italy, the only country of the pre-enlargement EU-15 where a programme of this type does not exist. First we compute the overall cost of a GMI under different assumptions about its generosity and adjustments for differences in the cost of living. Then, we discuss alternative options to finance the additional resources needed to implement the programme. Finally, we present an analysis of winners and losers from such reform and we discuss the type of preferences for redistribution that would be required to obtain political support for a GMI from the majority of the voting population.

In this paper the evolution of labour productivity and TFP is anlysed for the Italian regions at the sector level over the period 1980-2004 using growth accounting techniques. The results sugges that the decline in productivity after 1995 has been widespread across sectors and regions, although in southern Italy the decline has been weaker; in turn, TFP growth seems to have been the major responsible for both the decline of labour productivity growth and for explaining regional labour productivity growth differentials. The estimation of a TFP growth model inspired to be the Neo-Shumpeterian Growth Theory suggests that a key role in driving the different pattern in TFP growth between northern and southern regions may have been played by catching up processes, as regions that were far away from the technological frontier, mainly located in the south, have displayed faster TFP growth. The econometric results also suggest that spillover effects, R&D and, to a lesser extent, human capital may have been important drivers of the rate of innovation over the sample period. 

In this paper, we analyse the process by which the decisions of a regulated local public utility, in terms of productive efficiency and quality of the service provided, impact on prices of final consumption goods, supplied in a oligopolistic market operating in the sae geographic area. The regulation rules we consider are twofold: a Price-Cap mechanism and a Minimum Quality Standard constraing, both largely applied in the practice of public utilities regulation in industrialised countries. In particular in Italy these rules are applied in water and waste collection services. We obtain some formula for these effects which can be quantified by estimating firms' conditional input demand function of the public service and firms' inverse demand function for this public good, non-rival, component. Finally, we draw the effects of productive efficiency and quality on consumer welfare via changes on tariffs, external effects and final goods prices.

I review the literature concerning the determinants of yield spreads on government bonds. Due to the large attention received in the literature, I will refer to European and emerging markets. Europe has undergone significant institutional changes over the last decade and the corresponding market has become increasingly integrated. The value of bonds issued by emerging economies has reached high levels in the 1990's with important implications for the operation of international capital markets. This survey provides an extensive overview of the most recent explanations for the observed yield spreads on sovereign bonds.

 

In this paper we examine the features of the US wage Phillips curve over different time horizons analyzing the original Phillips’ specification on a scale-by-scale basis with data transformed by wavelet and band-pass filtering methods. Our results provide compelling evidence that the wage Phillips curve relationship is frequency-dependent, i.e. it varies across frequency bands. In particular, estimation results over frequency bands beyond the business cycle horizon, where the variables have large coefficient values, are very highly significant and explain a substantial proportion of the total variation of nominal wage changes, suggest that the medium-run may be a correct time frame for the wage Philips’ relationship.

Under the classical linear regression model assumptions, fixed effects estimates properly control for time-invariant unobservables and produce unbiased estimates. However, they often rely on limited data variability and present high standard errors. We present an innovative methodology that complements longitudinal data with other sources of unpaired data to increase estimation efficiency. The methodology assumes that the are no time varying unobservables correlated with the observables and with the fixed effects. We apply the methodology to three sets of Leaving Standard Measurement Study data from Nicaragua and estimate a household consumption model. We find that, if the correlation between observables and unobservables does not vary across time, our methodology has the potential to lead to unbiased and more efficient estimates.

We investigate the relationship between living standards and fertility, using a three-wave panel dataset from Indonesia to provide information on women’s fertility histories and the levels of consumption expenditure in the households to which they belong. We adopt a Bayesian approach to estimation and exploit the dynamically recursive structure implied by gestation lags to identify causal effects of living standards on fertility and vice versa.

This paper analyzes the effect of Employment Protection Legislation (EPL) on the conversion rate of temporary contracts into permanent ones in the same firm. Once EPL is enforced, two effects might arise: employers could tend to replace their permanent workforce with short-term employment because of the lower expected value of a filled job, but firms might also prefer to stabilize part of their temporary workforce both to reduce the uncertainty of costly job-breakups and to increase the matching surplus. Which of these two effects is dominant is ultimately an empirical question, and we exploit a natural experiment yielded by the Italian 1990 reform which introduced unjust dismissal costs for small businesses to identify the effect of EPL on the conversion rate of working and training contracts (Contratti di formazione e lavoro - CFL) into permanent ones in the same firm. We find that more stringent EPL acts positively on the conversion rates, and that the estimates remain similar for different robustness checks.

This paper focuses on changes in the Italian labour market over the decade 1993-2003. We estimate both aggregate transition matrices and micro-level multinomial logistic regression models to analyse flows between labour market states and their determinants. We aim to assess whether labour market intervention and regulation introduced in the nineties acted in the expected direction, that is helping disadvantaged categories such as women and the young. We find that, at least as far as our analysis goes, this has not been the case.

This paper investigates the reasons that determine students’ mobility in Italy and tries to explain why in the presence of quality differentials among universities the majority of students choose to remain in their regions of origin. We find that low mobility is related to family income and other financial and background characteristics. Low mobility in turn implies the existence of little competition among universities, and hence little incentive for improvement in either teaching or research. A crucial issue is therefore to evaluate if and how the government may affect this process and improve the supply of higher education quality and the degree of competition among academic institutions.

This study investigates inflation perceptions, and their relationship with factors likely to affect them, through a survey of a representative sample of Italian consumers. The results show that reported inflation is, on average, much higher than measured by official statistics. Inflation perceptions are higher for women, the unemployed and less educated individuals, as well as for consumers with some forms of financial distress. A very low knowledge of the inflation concept and related statistics and an inaccurate memory of past prices turn out to play a significant role in explaining the highest class of perceptions. These results suggest that when consumers express their opinions on what they report as “inflation”, they are incorporating a complex combination of forces that go well beyond the phenomena measured by official inflation statistics.

Since February 2003 ISAE collects quantitative inflation opinions, within its monthly survey on Italian consumers. Data confirms the severe overestimation of inflation already emerging from a companion study on Italian consumers (Del Giovane, Fabiani and Sabbatini, 2009); moreover, quantitative replies are in line with more traditional qualitative evaluations derived from the same survey, indicating that overestimation is not a random outcome resulting from casual answers. A first explanation calls for inadequate knowledge of inflation statistics: however, scarce information does not explain per se overestimation. Indeed, overestimation varies across personal characteristics and it is strongly correlated with assessments on economic conditions, those being more optimistic generally showing lower inflation opinions. It is possible that with a scarce statistical knowledge the consumers attribute to high inflation an “economic distress” mainly determined by slow growth of disposable income and psychological factors linked to socio-economic circumstances.

The paper surveys and appraises the recent research on informational cascades and herding behaviour in capital markets. Standard models of informational cascades hardly apply to capital markets where all publicly available information is reflected in the price and investment decisions are continuous. The paper briefly describes the situations in which an informational cascade may take place also in the context of financial markets and offers a critical review of both empirical evidence and experimental results.

Using daily data for the euro area, the paper estimates demand equations for reserves held by commercial banks at the central bank. The presence of the expected overnight rate among the regressors allows to gauge the announcement effect, the ability by the central bank to influence the current overnight rate without resorting to open market operations, e.g. via the announcement of an official interest rate change, or a speech by one of its top executives. The estimated semi-elasticities to the current and expected rate have opposite signs and are very similar in absolute value. This implies that central bank statements affecting the expected overnight rate trigger an arbitrage mechanism whereby the current rate moves in the same direction and by the same amount, leaving the market for liquidity in equilibrium without any need for the central bank to resort to liquidity management. The equations are also used to gauge the liquidity effect, the reaction of short-term interest rates to a monetary base shock.

Despite the reforms of recent years, the development of pension funds in Italy remains unsatisfactory, limiting workers’ retirement saving and hampering the capital market. This study analyzes the reasons for the lag, examines the potential benefits of supplementary pension schemes for workers, and considers possible policy measures to foster their growth.

During the first half of the 1990s a pool of Italian judges carried out an investigation, named Mani Pulite (literally clean hands), that led many public officials to be prosecuted and convicted because of corruption. We show that Mani Pulite broke down the perverse linkage between corruption and public spending which characterized the Italian economy previously.

Building on my discussion of the paper by Daveri - Jona-Lasinio (2005) on Italy’s economic decline, I first enlarge the perspective of their key findings by considering developments in the US and the European economy. Moreover, I take a different perspective that hinges on the literature on productivity and business cycle, providing theoretical and empirical arguments that lend support to alternative views. This pertains especially to the role of reallocation effects in aggregate productivity and the link between market liberalization and productivity dynamics.

"Sunto di alcuni capitoli di un nuovo trattato di economia pura del Prof. Pareto," Giornale degli Economisti, [2], 20 (March, June 1900), 216-235, 511-549

Pareto, V. "Le equazioni dell'equilibrio dinamico," Appendix (pp. 253-259) to the article "Le nuove teorie economiche: Appunti," Giornale degli Economisti, [2],23 (September 1901)

Pareto, V. "Di un nuovo errore nello interpretare le teorie dell'economia matematica," Giornale degli Economisti, [2],25 (November 1902), 401-433

Pareto, V. "A proposito del massimo di ofelimità," Giornale degli Economisti, [2],26 (February 1903), 177-178

Pareto, V. "Economia Sperimentale," Giornale degli Economisti e Rivista di Statistica, 28(57), (July 1918), 118