Interbank Lending, Liquidity and Banking Crises

In this paper, we show that abandoning the Diamond and Dybvig hypothesis of a unique bank representing the entire banking system gives rise to the possibility of endogenizing the interbank exchanges. In a system characterized by uncertainty regarding the moment of withdrawal of deposits, access to interbank liquidity decreases the bank risk of failure and bank runs. The possibility, moreover, to invest excess liquidity in the interbank market at a positive interest rate increases expected bank profits.
(J.E.L.: E52, G21).     

Aging and Retirement: Evidence Across Countries

How do demographic factors influence retirement? Using a large cross-country data set, I show that in countries with a larger share of elderly in their population the length of retirement is longer. This result holds true if I control for wealth effects, and when the effective labor force participation rate of the elderly is used instead of the official retirement age. Retirement policies and the social security size are strictly related: a new variable, representing the aggregate relevance of retirement policies, turns out to be significant in explaining the size of social security. Finally, the total amount of social security transfers is positively related with the increase of the elderly population, while in per capita terms this relation is not significant.     

Uniqueness of ASM solutions in rational expectations models: An example

Using a technique recently proposed by Gourieroux, Laffont and Monfort (1979) we prove that for a process m_t asymptotically stationary in mean (ASM) the solution for the price level equation proposed in Fischer (1979) and in Blinder and Fischer (1979) is the unique ASM solution.     

Game Theoretic Models of Wage Bargaining

This paper aims at being a tool to help apply game theoretic bargaining models to wage negotiations. In this perspective, we review a number of articles which explicitly deal with wage determination as well as purely game theoretical models which we believe can be fruitfully extended to account for specific features of labour markets. We discuss some common shortcomings in the wage negotiation literature, and suggest possible lines of research worth pursuing to deal with such weaknesses.     

Simultaneous Adjustment of Quantities and Prices: An Example of Hamiltonian Dynamics

In a well-known essay first published in 1953, Goodwin analyzed the dynamic adjustment of quantities and prices to long-run equilibrium values, in a set ofn ‘Walrasian’ markets. He treated the crossed adjustment of prices and quantities as a linear Hamiltonian vector field. In more recent work, Goodwin introduced non-linear perturbations in his multi-sectoral adjustment model. He assumed that real consumption depends non-linearly on relative prices. This paper shows the following: (1) Goodwin's behavioural hypotheses are compatible with the assumption that agents maximize; (2) if the dynamic process is Hamiltonian, then symplectic coordinate changes are essential tools of analysis; (3) if the real wage is rigid and returns to scale are not constant, then the Hamiltonian model can generate chaotic transients or, in extreme cases, pure chaotic motions.     

Distributional Effects of Price Reforms in the Italian Utility Markets*

In this paper, we analyse some distributional effects of the reforms to water and energy services in Italy. We first document the new regulation setting in these services, illustrating the dynamics of utility prices and of household expenditure in the period 1998‐2005. We then propose a way to measure the affordability of public utilities, in order to investigate how many households would incur a potentially excessive burden if they consumed a minimum quantity of utility services. Finally, we calculate this index on data from the Survey on Family Budgets (Indagine sui consumi delle famiglie). Our results show how the affordability of utility bills varies from region to region depending on climate, income, family endowment and family size. The analysis ‐ also based on a counterfactual exercise ‐ finds that so far, utility reforms do not seem to have produced any negative effects on weaker households.     

The Gravity of Intermediate Goods

Review of Industrial Organization - One of the puzzles of the gravity literature is the persistent effect of distance on trade flows, despite the dramatic fall in trade costs during the last few...     

Risk factors and geographical heterogeneity in unintentional home injuries incidence rate: new evidence based on Multiscopo survey in Italy

Home injuries together, with road traffic accidents, are estimated to be the third cause of death in Italy (Arokiasamy and Krishnan 1994). However, as in most other countries, in Italy there is a lack of information on home injuries and on how differences in geographical patterns may influence the scope and magnitude of this phenomenon. By analysing a multipurpose large survey (Multiscopo) carried out annually, geographical heterogeneity in home injuries incidence rate can be investigated. The aim of this study is the assessment of possible differences in geographical patterns among the Italian regions making use of a re-analysis of Multiscopo home injury data. The study results show that Italian regions differ greatly in the number of home injuries. The geographical heterogeneity may be due to the unemployment rate and the incidence of poverty that is greater in the Southern and Insular regions than in other zones. Other socio-economic variables such as alcohol consumption can increase the risk of injury in the home. To prevent them it could be useful to organize campaigns aimed at increasing the awareness among people about this problem.     

Sustaining Collusion under Economic Integration*

In this paper, we aim at investigating from a game‐theory perspective whether trade liberalization can promote a collusive two‐way trade. We show that, under Cournot competition, economic integration is anti‐competitive if collusive trade is a possible outcome of the repeated game; under price competition, the likelihood of collusive trade is a necessary but not sufficient condition for trade liberalization to be pro‐competitive. Furthermore, we show that economic integration may increase the scope for collusion irrespective of the firms’ strategic variable.