Long-run Effective Demand in the US Economy: An Empirical Test of the Sraffian Supermultiplier Model

The Sraffian supermultiplier is a model of demand-led growth that stresses the importance of the autonomous components of aggregate demand (exports, public spending and autonomous consumption). This article tests empirically some major implications of the model employing macroeconomic data for the United States. In particular, we study the long-run relation between autonomous demand and output through cointegration analysis. The results suggest that autonomous demand and output are cointegrated and that autonomous demand exerts a long-run effect on output. There is also some evidence of simultaneous causality, especially in the short-run. Movements in autonomous demand and in the investment share are also found to be positively related, with Granger-causality going from Z to I/Y.     

Eating With Your Eyes: How Packaging Visual Cues Affect Content Estimation and Self-control in Virtue and Vice Food

This research investigates the effects of visual cues depicted on food packaging on consumers’ estimates of the contained amount and consumers’ self-control intentions. Results from two experiments show that the number of product units shown on the package drives perceptions and behavioral intentions in food categories where product size tends to be quite standardized, supporting the “see more, expect more” effect reported by previous literature, but adding a “see virtue, expect more” effect triggered by product type. Instead, when product size tends to vary across manufacturers, picture size has a greater effect on consumers’ content estimations and self-control intention than the number of product units depicted, suggesting the existence of a “see small, expect more” effect according to which consumers estimate larger content when the package portrays smaller product units. Results stimulate awareness of the effects that can be conveyed by images on packaging, on content estimates and consumer self-control.     

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.     

Riding out of a financial crisis: The joint effect of trust and corporate ownership

We study how generalized trust shapes the ability of firms with different ownership forms to obtain trade financing and perform during a financial crisis. Exploiting geographic variations in trust across Italian regions and the occurrence of the 2008-09 financial crisis in a difference-in-differences setting, we show that generalized trust makes family firms less able to obtain trade financing during the crisis. This finding maps into performance results: trust alleviates the negative effect of a crisis for non-family firms, while it aggravates the negative effect for family firms. This latter result depends crucially on a firm's corporate governance: trust does not harm family firms whose board is open to non-family directors. Collectively, our findings illustrate how culture interacts with corporate attributes in shaping a firm's prospects.     

On the role of unobserved preference heterogeneity in discrete choice models of labour supply

The aim of this paper is to analyse the impact of unobserved preference heterogeneity in empirical applications of discrete choice models of labour supply. Typically, unobserved heterogeneity is estimated either with continuous or discrete mixture models. However, in order to avoid estimation difficulties, most of the empirical analysis assumes a relatively constrained mixture, standard examples being models where only few coefficients are allowed to vary with independent normal distributions or with discrete distributions with few mass points. We compare labour supply elasticities obtained with these typical specifications of unobserved heterogeneity with those from a more general model that we are able to estimate through an EM algorithm for the nonparametric estimation of mixed models. Results show that labour supply elasticities change significantly with respect to a basic model without unobserved heterogeneity only when the joint distribution of the varying tastes is left completely unspecified.     

Estimating Market Power by Retailers in a Dynamic Framework: the Italian PDO Cheese Market

In this article, we evaluate the role of market power by retailers within the supply chain of Parmigiano Reggiano (PR) and Grana Padano (GP), the two most famous Italian quality cheeses. Market power is analysed in the context of a dynamic imperfect competition model of the supply chain, in which retailers are allowed to exert market power both downstream and upstream. We jointly estimate market‐power parameters together with supply and demand elasticities, by means of a structural system of demand, supply and price‐transmission equations, estimated using the generalised method of moments. We find evidence of downstream market power by retailers (toward final consumers) for PR and GP, but no evidence of upstream market power (toward processors/ripeners). These results may be explained by the structure of the supply chain and by the peculiar characteristics of the two cheeses.     

Evolutionary variational inequalities and applications to complex dynamic multi-level models

In this paper we consider a supply chain network model with three tiers of decision-makers (manufacturers, retailers, and consumers) in the case when prices and shipments are evolving on time. Moreover, we assume that excesses of production and excesses of demand of the commodity are present. For such a framework we furnish, using the infinite dimensional duality theory, the equilibrium conditions for the representatives of each tier of the supernetwork, the time-dependent variational formulation governing the complete supply chain supernetwork, and we provide some existence theorems and a numerical example.     

The spinning jenny and the guillotine: technology diffusion at the time of revolutions

Scale economies and demand, combined with the relative prices of input factors, can provide an economic explanation to the location and timing of the Industrial Revolution. Its labor-saving innovations were profitable only above a minimum output threshold, which allowed to cover the upfront cost of capital. In turn, the possibility to exceed such threshold depended on consumer demand, which was affected by the level and by the distribution of real income. The case of the spinning jenny and the cotton industry in England and France serves as a valuable case study to show how scale and demand considerations might have mattered even at the eve of the Industrial Revolution, thus implying also a potentially important role for income distribution.     

Asymmetric Perception of Sparse Shelves in Retail Displays

We investigated a perceptual bias in recognizing partially stocked shelves in retail displays. Across a series of experiments, a total of 475 right-handed participants were asked to discriminate between pairs of store displays that were more versus less stocked with items. When asked to identify the sparser display in a sterile environment, participants were significantly faster and more accurate in responding to images presented in the left visual field (LVF) than to images presented in the right visual field (RVF). The perceptual asymmetry persisted in a realistic setting, and was prominent under conditions of high task difficulty. The results are consistent with a view of this sparse-shelf bias as emerging from selective hemispheric activation to quantities rapidly assessed during a shopping trip.     

Do food standards affect the quality of EU imports?

This paper investigates the relationship between the diffusion of EU standards and product quality upgrading using highly disaggregated import data to the EU in the food industry. Results show that, on average, the diffusion of EU voluntary standards boosts the rate of quality upgrading. However, the results are heterogeneous when moving from primary to processed foods, and from ISO to non-ISO standards.