European Monetary Integration and the ‘Constitutionalization’ of Macroeconomic Policy Making

This work discusses the constitutionalization of rules in macroeconomic policy-making in the European Union (EU) with reference to European monetary integration. The analysis deals with two main monetary arrangements, the European Monetary System (EMS) and the Economic and Monetary Union (EMU), and focuses on one country - Italy. Using an interdisciplinary perspective and a constitutional political economy approach, three sets of factors are identified to explain how and why policy-makers may decide to self-limit their sovereignty in monetary and fiscal policies, as they have done in the process of European monetary integration. It is argued that such factors influenced the dynamics and evolution of the European monetary arrangements, shaping the path to EMU.     

SELF‐REPORTED ECONOMIC CONDITION AND HOME PRODUCTION: INTRA‐HOUSEHOLD ALLOCATION IN ITALY

This paper applies a collective model of intra‐household welfare distribution using individual self‐reported data. The model accounts for household production, and self‐reported information on economic condition is used to identify the sharing rule governing the bargaining process in the family. The theoretical framework implies a broad concept of full income, which includes household production as time allocated to domestic activities. We find that self‐reported data on economic status are useful in recovering individual shares of household income and that both wages and non‐strictly‐economic individual variables play an important role in the bargaining process determining the sharing rule in Italy.     

Credit card debt and consumption: evidence from household-level data

This research investigates the relationship between credit card debt and consumption using household level data. This is a departure from the previous studies which have used aggregate measures of consumption and general debt such as the Debt Service Ratio or total revolving credit. We use a detailed monthly survey of credit card use to impute credit card debt to respondents from the Consumer Expenditure Survey sample. In contrast to some earlier studies using aggregate data, we find a negative relationship between debt and consumption growth. Our work shows that a $1000 increase in credit card debt results in a decrease in quarterly consumption growth of almost 2%. Investigations are also made into effects of debt within different age categories and into the impact of expected income growth on the debt–consumption relationship.     

Long‐run relations in European electricity prices

This paper analyses the interdependencies existing in wholesale electricity prices in six major European countries. The results of a robust multivariate long‐run dynamic analysis reveal the presence of four highly integrated central European markets (France, Germany, the Netherlands and Austria). The trend shared by these four electricity markets appears to be common also to gas prices, but not to oil prices. The existence of a common long‐term dynamics among electricity prices and between electricity prices and gas prices can be explained by the similarity of the market design across Europe and by the same marginal generation technology. Since standard unit root and cointegration tests are not robust to the peculiar characteristics of electricity prices time series, we also develop a battery of robust inference procedures that should assure the reliability of our results. Copyright © 2009 John Wiley & Sons, Ltd.     

The Effects of Ownership and Governance on SMEs’ International Knowledge-based Resources

Small- and medium-sized enterprises (SMEs) play an important role in today’s global economy. However, there are significant differences in how they respond to the opportunities and threats in international markets. This study␣suggests SMEs’ ownership and governance systems significantly influence the development of knowledge-based resources necessary for internationalization. Using a sample of 384 US SMEs, we find a positive relationship between both the equity held by top management team members and venture capitalists and the development of these important resources. This positive association is further accentuated by the presence of independent outside directors on SMEs’ boards, supporting their monitoring and enterprising roles.