Labor market institutions and inflation volatility in the euro area

Despite having had the same currency for many years, EMU countries still have quite different inflation dynamics. In this paper we explore one possible reason: country specific labor market institutions, giving rise to different inflation volatilities. When unemployment insurance schemes differ, as they do in EMU, reservation wages react differently in each country to area-wide shocks. This implies that real marginal costs and inflation also react differently. We report evidence for EMU countries supporting the existence of a cross-country link over the cycle between labor market structures on the one side and real wages and inflation on the other. We then build a DSGE model that replicates the data evidence. The inflation volatility differentials produced by asymmetric labor markets generate welfare losses at the currency area level of approximately 0.3% of steady state consumption.     

Imports,Exports and the Firm Product Scope: Evidence From Turkey

By exploiting an original firm‐product level dataset for Turkish manufacturing, ‐way trading on firm product scope and innovation in a multiple treatment setting. Our evidence points at the prominent role of exporting, while no effect is found for importing only. Nonetheless, we corroborate existing evidence on the virtuous nexus between the two international activities and add to the literature by showing that joint firm involvement in exporting and importing fosters product innovation and quality upgrading.     

Rethinking the import-productivity nexus for Italian manufacturing

We provide evidence on the firm level productivity effects of imports of intermediates. By exploiting a large panel of Italian manufacturing firms, we are able to separately explore the role of importing from high and low income countries. Importing does not permanently affect the firm productivity growth. This finding holds both when we test for the import entry by means of Propensity Score Matching techniques and when we analyse the import intensity within a dynamic panel data model framework. On the contrary, we confirm the existence of self-selection into importing. Also, our evidence supports the learning-by-exporting effects in Italian manufacturing and we prove that this result is robust to the control of firm import activity.     

On the statistical identification of DSGE models

Dynamic Stochastic General Equilibrium (DSGE) models are now considered attractive by the profession not only from the theoretical perspective but also from an empirical standpoint. As a consequence of this development, methods for diagnosing the fit of these models are being proposed and implemented. In this article we illustrate how the concept of statistical identification, that was introduced and used by Spanos [Spanos, Aris, 1990. The simultaneous-equations model revisited: Statistical adequacy and identification. Journal of Econometrics 44, 87–105] to criticize traditional evaluation methods of Cowles Commission models, could be relevant for DSGE models. We conclude that the recently proposed model evaluation method, based on the DSGE–VAR(λ)$\left(\lambda \right)$, might not satisfy the condition for statistical identification. However, our application also shows that the adoption of a FAVAR as a statistically identified benchmark leaves unaltered the support of the data for the DSGE model and that a DSGE–FAVAR can be an optimal forecasting model.     

Internationalization of Italian Firms in Central and Eastern European Countries: Headquarters–Subsidiary Relationship

This article aims at providing further empirical evidence about the international activity of Italian small and medium enterprises (SMEs). In particular, the present contribution can be ascribable to the stream of research regarding the headquarters–subsidiary relationship. Focusing our attention on the subsidiary of Italian SMEs internationalized in Central and Eastern European countries (CEECs), we provide evidences about the main variables affecting their autonomy. Literature review provides us evidences of the fact that subsidiary autonomy is an extremely heterogeneous topic to investigate. Consequently, we decided to add to the quantitative analysis also a qualitative one. Through personal interviews with the Italian entrepreneurs and the managers of the local subsidiaries, we got a better and deeper insight into the evidences coming from the quantitative data.     

Import penetration and returns to tasks: recent evidence from the Peruvian labour market

This paper provides original evidence on the impact of import penetration on wages of individuals performing manual/cognitive task-intensive jobs in the Pe     

New Evidence on Export Price Elasticity from China and Six OECD Countries

This paper provides new evidence on export price elasticities by analyzing the cases of China, France, Germany, Italy, Japan, UK and the USA over the period 1990–2012. Estimates have been made using panel data techniques for non‐stationary data. After demonstrating that long‐run relationships are stable to any structural break, it is found that exports are significantly determined by foreign demand, with long‐run income elasticity significantly higher than unity for China, Japan, Germany, the UK and the USA. Conversely, exports are price inelastic for most of the countries in the sample, in both the long run and the short run. The exception is France, whose export price elasticity is lower (higher) than unity in the short run (long run).     

China and India in the international fragmentation of automobile production

We explore the relative positions of China and India in the international fragmentation of automobile production by analyzing disaggregated trade flows, while distinguishing between final and intermediate goods. The size and composition of trade has significantly moved in favor of trade of components over the last decade, but major differences exist between the two countries; China is a net car importer, while India is a net car exporter. We find evidence of the increasing importance of two-way trade in vertically differentiated goods, indicating that China and India are becoming more active participants in the vertical division of labor in automotive production.     

Trade policy: Home market effect versus terms-of-trade externality

We study trade policy in a two-sector Krugman (1980) trade model, allowing for wage, import and export subsidies/taxes. We study non-cooperative trade policies, first for each individual instrument and then for the situation where all instruments can be set simultaneously, and contrast those with the efficient allocation. We show that in this general context there are four motives for non-cooperative trade policies: the correction of monopolistic distortions; the terms-of-trade manipulation; the delocation motive for protection (home market effect); the fiscal-burden-shifting motive. The Nash equilibrium when all instruments are available is characterized by first-best-level wage subsidies, and inefficient import subsidies and export taxes, which aim at relocating firms to the other economy and improving terms of trade. Thus, the dominating incentives for non-cooperative trade policies are the fiscal-burden-shifting motives and terms-of-trade effects.