The Service Sector in Planned Economies of Eastern Europe: Past Experiences and Future Perspectives

The widely shared view of service sector growth in Centrally Planned Economices (CPEs) is that it was hampered by the tremendous industrialisation effort which ‘crowded out ‘service sector employment and investment. After a brief discussion of western and eastern service sector theories, the authors try to show that while the crowding-out thesis is valid for the period of accelerated industrialisation, it cannot be so easily applied to the behaviour of all CPE countries during the post-war period as a whole. They show differentiated time-pattern of employment and investment growth.     

On the Decomposition by Subgroups of the Gini Index and Zenga's Uniformity and Inequality Indexes

Besides a brief historical outline of the Gini index decomposition proposals, we compare, in a subgroups framework, the decompositions of the Gini index and of the uniformity and inequality indexes recently proposed by Zenga. The two decompositions follow a similar scheme: in both cases the overall index can be at first expressed as a weighted average of convenient "cross" measures, with their own interpretation, and afterwards it is decomposed into a within and a between term by merely distinguishing measures evaluated within the same subgroup from the ones regarding different subgroups. This procedure does not depend on an a priori definition of the within or the between term and allows their contribution to be naturally evaluated preserving the structure of the index itself. In the last section the two decompositions are applied to the Italian net household wealth provided by the 2006 central Bank of Italy sample survey on household budgets.     

关于宏观经济政策的若干反思

大稳健时期让宏观经济学家和政府决策者误以为大家已熟练掌握了宏观经济政策运用，本次危机显然对此观点提出了挑战。为此，国际货币基金组织（IMF）专家对危机前的宏观经济政策进行了重视审视，分析了主要共识，指出其中存在的失误，以及哪些危机前的框架原则当前仍能适用，并尝试建立新的宏观经济政策框架。建议应该对通货膨胀目标进行重视审视，协调运用货币政策和监管政策，统一通货膨胀目标制与汇率政策，更广泛地提供流动性，注意积蓄财政政策空间，设计更好的财政自动稳定机制。     

Time-series and cross-sectional excess comovement in stock indexes

This paper is an empirical investigation of the excess comovement among 82 industry indexes in the U.S. stock market between January 5, 1976 and December 31, 2001. We define excess comovement as the covariation between two assets beyond what can be explained by fundamental factors. In our analysis, the fundamental factors are sector groupings and the three Fama-French factors. We then estimate residuals of joint (FGLS) rolling regressions of these fundamentals on industry returns. Finally, we compute excess comovement as the mean of square unconditional, statistically significant correlations of these residuals. We show that excess comovement is high (about 0.07, i.e., equivalent to an average absolute correlation of 0.26), statistically significant, and represents an economically significant portion (almost 30%) of the average gross square return correlation. Excess comovement is also uniformly significant across industries and over time and only weakly asymmetric, i.e., not significantly different in rising or falling markets.We explain more than 23% of this market-wide (and up to 73% of sector-wide) excess square correlation by its positive relation to proxies for information heterogeneity and U.S. monetary and real conditions, and its negative relation to market volatility and the level of the short-term interest rate. This evidence is consistent with the implications of portfolio rebalancing and product market theories of financial contagion, but offers little or no support for the correlated liquidity shock channel.     

A brain imaging study of the choice procedure

We study the behavior of subjects facing choices between certain, risky, and ambiguous lotteries. Subjects' choices are consistent with the economic theories modeling ambiguity aversion. Our results support the conjecture that subjects face choice tasks as an estimation of the value of the lotteries, and that the difficulty of the choice is an important explanatory variable (in addition to risk and ambiguity aversion).The brain imaging data suggest that such estimation is of an approximate nature when the choices involve ambiguous and risky lotteries, as the regions in the brain that are activated are typically located in parietal lobes. Thus such choices require mental faculties that are shared by all mammals, and in particular are independent of language. In contrast, choices involving partial ambiguous lotteries additionally produce an activation of the frontal region, which indicates a different, more sophisticated cognitive process.     

The new Capital Accord and banks’ lending decisions

Capital requirements (‘pillar one’ of the new Capital Accord) rising with the increase in borrowers’ PDs were thought as being likely: (i) to have a serious impact on the financing of small and medium-sized enterprises (usually riskier than large corporates) and (ii) to increase the procyclicality of the supply of credit.

The aim of this paper is to provide an empirical evaluation of the possible impact of the new Accord proposals on the lending policies of Italian banks. We compare the interest rate charged to a large set of Italian firms with the cost brought about by the change in the calculation of capital requirements. Since the two variables move together in response to an increase in borrowers’ PDs, we conclude that the new regulatory approach to measuring capital adequacy appears consistent with banks’ own risk evaluations. This result is supported by a ‘stress testing’ exercise: the relationship also holds in a distressed economic scenario, which replicates the financial conditions of the Italian corporate sector in the 1993–1994 recession.     

A Short Overview of a Methodology for the Ex-Post Review of Merger Control Decisions

Summary  This paper is based on a study commissioned by the European Commission, in which we proposed a detailed methodological approach for the ex-post assessment of decisions reached by the European Commission in the field of merger control. The methodology focuses on how to establish whether the market structure arising from the decision is apt to protect consumer welfare better than the market structures that could have arisen from alternative decisions. It provides suggestions on how assess the impact of the decision relative to the possible counterfactuals and discusses the empirical techniques that can be used to perform this evaluation.     

Two months in the life of several gilt-edged market makers on the London Stock Exchange

We investigate the micro structure of the UK gilt market studying the behaviour of several gilt-edged market makers on the London Stock Exchange. Through a structural model of the price process we can test different microstructural hypotheses, concerning information asymmetries, transaction and inventory carrying costs, and market liquidity. Our results suggest that inventories do not alter the price process in the gilt market. Moreover, in contrast to customer orders, inter-dealer transactions possess an information content. Transaction costs in the inter-dealer market are also substantially smaller than those for external customers.     

Social Change: Measurement and Theory*

Societal change, which takes a variety of directions and forms and in no way can be assimilated or reduced to a single dimension, is often accompanied by a perception of insufficient understanding and lack of control. There is a frustrated need for mastering complexity and instability, separating the voluntary from the involuntary, the intended from the unintended, opportunities from risks, getting to the real causes and dominating the uncertain implications of social change. Social change catches us unprepared and confused. In this context statistics are generally considered a fundamental instrument of knowledge, but also part of the problem! In the public debate and in the specialized literature, the ability to measure social phenomena through current statistics and indicators is increasingly questioned. Data-it is claimed-are lacking, particularly longitudinal data; their quality (accuracy, relevance, timeliness, comparability, etc.) should be improved; indicators do not provide early warning signals, policy performance evaluation, and a precise indication of outcomes. Statistics cannot be used as a reliable and timely basis for decision making by individuals, organizations, governments, and for understanding these decisions. In some cases, statistics have been accused of giving a misleading and false picture of reality: do we measure the real extent of social exclusion and unemployment? Do we fully capture the quality of life and the degradation of the environment? Mismeasurement has been deemed by some commentators as being responsible for the wrong focus in inflation and stabilization policies, science and technology, unemployment and poverty. The productivity paradox, the informal economy, failure to measure welfare and the quality of urban life are instances where statistics do not seem to provide complete and satisfactory answers to the demand for information and knowledge. Our paper illustrates how, quite independently of measurement techniques and data production processes, the inadequacy of the conceptual framework may explain mismeasurement in relation to complex (multidimensional) and dynamic social phenomena. It is then to social theories, explanations and interpretations that statisticians need to turn, in order to come to grips with the new challenges in social measurement. We will develop this thesis looking at a few cases where measurement issues can be connected to both theoretical and empirical difficulties. The statistical gap which reveals itself in the mismeasurement or difficult measurement of social phenomena is closely interconnected with the social science gap. Only close collaboration between statisticians and social scientists can bring about continuous advancement in social science and quality improvement in social statistics.