“Set a Sufficiently Ambitious Budget Target and Let the Automatic Stabilizers Work”. Will it Really Work in the European Monetary Union?

We examine the popular recipe in the title by means of an AD-LM-AS two-country model of the EMU, controlling for asymmetry in demand and supply shocks and in the monetary-policy transmission mechanism. Unless structural symmetry holds and symmetric shock occurs, national automatic stabilizers, even though supplemented with the common monetary policy, cannot deliver optimal stabilization in each economy. Inflation and output gaps are not closed and may be divergent in sign. Considering that a federal system of inter-regional insurance is lacking, the recipe under examination is too optimistic, while serious threat to EMU cohesion may arise. The econometric estimates we present show that existing national fiscal systems work very poorly as for the minimization, after shocks, of the dispersion of national incomes around the EMU average.     

Gender-Related Variability in Information Processing of Disclosure Documents

Journal of Consumer Policy - Disclosure is used worldwide as a tool to increase transparency and help investors to make their decisions, thus partially overcoming asymmetric information in...     

The dimensional assessment of personality in drug addicts: a mixed-effects Rasch model approach

Drug abuse results from a series of different factors, such as social and family issues. Subjects more vulnerable to develop an addiction are, for instance, people living in high-stress environments who may resort to addiction in order to cope with their circumstances, such as demanding jobs, family crisis or other situations or people living in low-income households where violence occurs, who may be triggered into addiction as a way to escape negative emotions or ignore any underlying problems or issues. Psychometric research in the field of drug dependence has focused on identifying certain personality characteristics. It is now generally agreed that personality may influence, precipitate or perpetuate substance abuse. The aim of this paper is to perform a dimensional assessment of personality in a sample of drug addicts. To better understand the complexity of addictive behaviours of substance-using individuals, the Cloninger’s temperament and character inventory test is employed while the item response data analysis is performed by mixed-effects Rasch models. These models combine the advantages both of Rasch measurement framework for latent variables and of models with hierarchical data. To evaluate the differences in dimensions of temperament and character inventory test in subjects with drug addiction, we fit and compare a sequence of mixed-effects Rasch models. Results from models fitting are compared and discussed for a data set of 84 participants.     

Zero Hours Contracts and Their Growth

This article studies the prevalence and nature of zero hours contracts (ZHCs) in the UK labour market. It is widely argued that the headline count of ZHC workers based on the Labour Force Survey historically underestimated the number of workers in ZHC jobs. Here, we argue that this likely continues to be the case, particularly if one considers other, similar, no-guaranteed-hours jobs alongside ZHCs. ZHC jobs and workers are heterogeneous, but ZHCs have become increasingly concentrated among young workers, full-time students, migrants, black and minority ethnic workers, in personal service and elementary occupations, and in the distribution, accommodation and restaurant sector over time. Compared to other forms of employment, median wages in ZHC jobs have also fallen. The most common prior labour market state for ZHC workers is non-ZHC employment, particularly part-time employment, with part of the reported growth in ZHCs driven by reclassification of existing employment relationships. Finally, we show that growth in public awareness of ZHCs contributed substantially to recent growth in reported ZHCs, particularly over the period 2013/14.     

The skill profile of the employees and the provision of flexible working hours in the workplace: a multilevel analysis across European countries

This article investigates the relationship between the skill profile of the employees (i.e. the percentage of employees in highly skilled jobs) and the provision of flexible working hours in the workplace (i.e. the proportion of employees entitled to adapt, within certain limits, the time when they begin or finish their daily work according to their personal needs or wishes). Analyses draw on the 2009 European Company Survey, conducted on a representative sample (N = 26,640) of European establishments in 29 countries. Multilevel mixed‐effects linear regressions are used to study to what extent both workplace‐level and national‐level variables affect this relationship. Findings suggest a strong, positive and non‐linear relationship between the variables under scrutiny, which is moderated, at national level, by both unemployment and trade union density rates.     

Conditional cooperation in a sequential move game

Cooperation is a pervasive social phenomenon, but more often than not economic theories have little to say about its causes and consequences. In this paper, we explore the hypothesis that cooperative behaviour might be motivated by pure self-interest when the “social” payoff in a game is increasing. We report the results of a series of experiments on the Centipede game. The experiments are organised in two subsequent steps. Subjects first participate in a 2-period trust game, randomly matched with unknown partners. We apply the strategy method in order to elicit their social preferences. On the basis of their pre-game behaviour, individuals are divided into three main social groups: selfish individuals, pure altruists and reciprocators. At the second step of the experiment, subjects play a repeated 6-move Centipede game with an increasing final payoff. Each subject plays twice, in a low and in a high-stake Centipede game, and he/she is informed about his/her co-player social preferences. We provide statistical evidence to identify the origin of cooperation within homogeneous and heterogeneous social groups. We construct a Poisson regression model to assess the determinants of the duration of conditional cooperation in the Centipede.     

Contagion across Eurozone’s sovereign spreads and the Core-Periphery divide

This paper investigates the causes of disproportionate increases of sovereign yields with respect to the interest rate on the 10 years German Bund within the Eurozone. Empirical evidence drawn from the Bank for International Settlements dataset on banks’ portfolios shows that rapid financial integration, following the launch of the monetary union, resulted in excess exposure of Core countries’ banks in the Peripheral countries’ financial assets. In order to endogenize the possibility of contagion effects, we conduct econometric estimates through a Global Vector Autoregressive model, where each country’s spread depends upon all Eurozone countries’ spreads. Results show that after the burst of the financial crisis the Core countries’ sovereign yields are essentially determined by the international risk aversion, whereas the spreads of Peripheral countries mainly depend on fundamentals, namely the public debt/GDP ratio and the Real Effective Exchange Rate values with respect to the Eurozone average. These results are supported by the estimate of an impulse response analysis. Macroeconomic failures in public finances and competitiveness seem to originate the exceptional increases in sovereign spreads of the Periphery, through a contagion effect which is limited to this group of Eurozone countries.     

Suit the action to the word,the word to the action: Eliciting motives for trust and reciprocity by attitudinal and behavioural measures

Two important primitives of social capital are the disposition to trust and to reciprocate manifested in social life. In this paper, attitudinal and behavioural evidence is used to investigate the nature of the motivations underlying behaviour in Trust and Dictator games. In doing so, we have three aims. First, to find out whether, and to what extent, answers to a questionnaire about attitudes towards trust and civicness predict subjects’ behaviour. Second, to disentangle strategic from other-regarding motivations by comparing behaviour in Trust and Dictator Games. Third, to investigate to what extent a correspondence could be found between subjects’ attitudinal ‘type’ and their behaviour in the two interactive experimental settings. The paper builds on previous work in the area and in particular finds that using surveys to distinguish between the behavioural responses of different attitudinal types–“Trusting” or “Prudent” on the one hand and “Trustworthy” or “Untrustworthy” on the other, allows us to dig deeper into the underlying motivations of the experimental subjects. The self-declared trusting tend to manifest trust by investing more in the risky interaction than the prudent, and the self-declared trustworthy are inclined to return more than the untrustworthy. Moreover, the self-reported trustworthy and untrustworthy tend to manifest positive or negative reciprocity, respectively. The evidence suggests that the former are moved by the intention to reward and the latter by the desire to punish a stingy Sender by returning an even smaller amount than received. This seems to confirm the “multiple self” view (Elster, 1986), whereby in the personality of each individual many components–possibly distant in terms of the motivating sentiments–are gathered together.