An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data

This paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality, the Environmental Performance Index. This indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and, in particular, can also capture the impact of pollution on human health. This allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem. From a panel data analysis, two regularities emerge. First, corruption deteriorates the overall environmental quality. This effect is robust and persistent. Second, our findings highlight the improvement of environmental quality as income rises, even at an initial level of development. This is not in contradiction with the EKC hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels. As a consequence, in emerging economies, policies fighting corruption and enhancing development are very likely to improve the environmental performances.     

Introducing students to bio-inspiration and biomimetic design: a workshop experience

In recent years, bio-inspired approach to design has gained considerable interest between designers, engineers and end-users. However, there are difficulties in introducing bio-inspiration concepts in the university curriculum in that they involve multi-disciplinary work, which can only possibly be successfully delivered by a team with integrated competencies. The aim of this work is summarising the results of the first workshop on bio-inspired design carried out at the Hybrid Design Lab of Seconda Università di Napoli, involving Year 2 students of the BSc in Industrial Design. The common theme proposed for their projects was “Bio-inspired design of sport”. Ideally, a sport item would need to respond to a number of exigencies, including safety, comfort, zero-energy balance and/or use of renewable energy sources, multi-functionality. The common aim of the projects was investigating in which cases bio-inspiration can assist in the fulfilment of the above exigencies. The students were asked to present examples from nature and, via an abstraction process, to apply them to the design of sport items. Finally, they were required to clarify the nature and the extent of bio-inspiration in their projects. Some of the projects, which were considered more interesting and realisable, are reported and briefly commented, especially on the nature, extent and appropriateness of their bio-inspiration. A test for feedback has been given to the students, whose scope, structure and general outcome is also discussed.     

Modelling and forecasting government bond spreads in the euro area: A GVAR model

This paper proposes an extension to Global Vector Autoregressive (GVAR) models to capture time-varying interdependence among financial variables. Government bond spreads in the euro area feature a time-varying pattern of co-movement that poses a serious challenge for econometric modelling and forecasting. This pattern of the data is not captured by the standard specification that model spreads as persistent processes reverting to a time-varying mean determined by two factors: a local factor, driven by fiscal fundamentals and growth, and a global world factor, driven by the market’s appetite for risk. This paper argues that a third factor, expectations of exchange rate devaluation, gained traction during the crises. This factor is well captured via a GVAR that models the interdependence among spreads by making each country’s spread function of global European spreads. Global spreads capture the exposure of each country’s spread to other spreads in the euro area in terms of the time-varying ‘distance’ between their fiscal fundamentals. This new specification dominates the standard one in modelling the time-varying pattern of co-movements among spreads and the response of euro area spreads to the Greek debt crisis.     

STATE DEPENDENCE IN LABOR MARKET FLUCTUATIONS

This article documents state dependence in labor market fluctuations. Using a Threshold Vector Autoregression (TVAR) model, we establish that the unemployment rate, the job separation rate, and the job-finding rate (JFR) exhibit a larger response to productivity shocks during periods with low aggregate productivity. A Diamond–Mortensen–Pissarides model with endogenous job separation and on-the-job search replicates these empirical regularities well. We calibrate the model to match the standard deviation of the job-transition rates explained by productivity shocks in the TVAR, and show that the model explains 88% of the state dependence in the unemployment rate, 76% for the separation rate and 36% for the JFR. The key channel underpinning state dependence in both job separation and JFRs is the interaction of the firm's reservation productivity level and the distribution of match-specific idiosyncratic productivity. Results are robust across several variations to the baseline model.     

Plastic Money Diffusion and Usage: An Empirical Analysis on Italian Households

This paper tries to contribute to the empirical literature on the European consumers’ plastic money payment habits, using the Bank of Italy data over the 1993–2008 period. In line with other evidence on this topic, mainly focused on the US economy, we find that age, education, non‐durable consumptions, regional variation and income are strong predictors of plastic money possession and use in Italy. We also find that households with a higher indebtedness level have a higher propensity to hold credit cards. Furthermore, we find that technological improvements, observed in the last 15 years, do not significantly affect the marginal probabilities to hold and use plastic money conditioned to the main socio‐demographic factors.     

Structural Analysis of Electricity Demand and Supply Interactions*

We specify a structural asymmetric vector error‐correction model to identify and estimate the demand and supply functions in hourly day‐ahead wholesale electricity markets. In doing so, we provide, inter alia, new insights into a well‐established but unresolved issue concerning the extent of the demand elasticity to price in these markets. We show that whilst demand appears to be inelastic in the short‐run, the quantity traded on the market is significantly influenced by the price level and responds to previous disequilibria in the supply curve through an asymmetric error‐correction mechanism, reacting to a positive disequilibrium but not to a negative one.     

A Flexible,Globally Regular Representation of Convex Production Possibilities Frontiers

This note describes how a convex N-input-M -output production possibility frontier can be locally approximated by means of a flexible Nonseparable Nested Constant-Elasticity-of-Substitution/Constant-Elasticity-of-Transformation (NNCES-CET) restricted profit function. This technique yields a summary representation of technology sets that is globally regular and thus suitable for use in applications where regularity is crucial.     

Technical efficiency and scale efficiency in the Italian banking sector: a non-parametric approach

Measures of technical and scale efficiencies are derived in the Italian banking industries by implementing non-parametric Data Envelopment Analysis on a cross section of 174 Italian banks taken in 1991. The methodology of the parametric and non-parametric approaches to measure efficiency are discussed. The existence of both technical and allocative efficiency is established. This result is robust to modifications in the specification of inputs and outputs suggested by the Intermediation Approach and by the Asset Approach. In implementing both the Intermediation and the Asset Approach the traditional specification of inputs is modified to allow an explicit role for financial capital. In addition, regression analysis is used on a bank-specific measure of inefficiency to investigate determinants of banks' efficiency. Efficiency is best explained by productive specialization, size and, to a lesser extent, by location.     

Well-posedness and invariant measures for HJM models with deterministic volatility and Lévy noise

We give sufficient conditions for the existence, uniqueness and ergodicity of invariant measures for Musiela's stochastic partial differential equation with deterministic volatility and a Hilbert space valued driving Lévy noise. Conditions for the absence of arbitrage and for the existence of mild solutions are also discussed.