The ‘recession-push’ hypothesis reconsidered

The relationship between unemployment and self-employment has been studied extensively. Due to its complex, multifaceted nature, various scholars have found a large array of different results, so that the exact nature of the relation is still not clear. An important element of the relation is captured by the recession-push hypothesis which states that in times of high unemployment individuals are pushed into self-employment for lack of alternative sources of income such as paid employment. We make two contributions to this literature. First, we argue that official unemployment rates may not capture the ??true?? rate of unemployment as it does not include ??hidden?? unemployed who are out of the labour force. Therefore, we propose a new method where the ??recession-push?? effect relates not only to the (official) unemployed but also to the inactive population. Second, we argue that the magnitude of the recession-push effect is non-linear in the business cycle, i.e. the effect is disproportionally stronger when economic circumstances are worse. We provide empirical support for our hypotheses by estimating an econometric model on Spanish data.     

Industrial Structures and Economic Growth: an Input–Output Perspective

The slow-down of economic growth in European countries in recent years raises important economic policyissues. Most economic observers consider that the reasons for the slow-down are structural and are to be found in rigidities on the markets of primary factors or lack of technological innovative capabilities. Input–Output analysis can provide valuable insights into the nature of the phenomenon, and could help to design structural policies in order to foster economic growth.     

Events and economic forecasting models

In the June 1972 issue of Futures, Olaf Helmer developed the idea of cross-impact analysis to include both events (singular occurrences) and trends (gradual developments).¹ The present article pursues further this idea, using an econometric forecasting model to represent the economic trends in an economy, and a sequential cross-impact method to analyse the events which could change its course. The application of this idea, also described in the article, suggests a procedure for improving the communication between model builders and final users.     

Countercyclical contingent capital

We analyze the optimal capital structure of a bank issuing countercyclical contingent capital, i.e., notes to be converted into common shares in poor macroeconomic conditions. A comparison of the main effects produced by the countercyclical asset with the simple equity-debt capital structure, the non-countercyclical contingent capital and the countercyclical callable bond is conducted. We demonstrate that this type of asset reduces the spread of straight debt and is effective in reducing the asset substitution incentive. The reduction of bankruptcy costs is strong only when the countercyclicality feature is removed. Contingent capital is useful for macroprudential regulation and we show that the countercyclical feature is important depending on priorities (moderate the asset substitution incentive or reduce bankruptcy costs).     

Managing demand uncertainty through order overplanning

Most techniques for managing demand uncertainty require a certain degree of stability in the environment, since they are completely or partially based on the observation of historical data. When applied to a context characterized by irregular and sporadic demand these techniques show poor performances. In fact, in such a case uncertainty management calls for the gathering of information that directly anticipates future requirements. Although contexts with irregular and sporadic demand have received only minor attention in the past, they are currently gaining ever more importance and extending their occurrence. This paper illustrates and discusses a method, called order overplanning, specifically designed to cope with uncertainty in these environments. It consists of an articulate and coherent set of forecasting procedures, planning principles and slack control techniques. From a Master Production Scheduling (MPS) perspective, order overplanning is similar to hedging and option overplanning: gross requirements are larger than expected demand. The major difference is that order overplanning uses two distinct units in the MPS and forecasting procedures: while the MPS unit is an end item or a module, the forecasting unit is a customer order. This makes order overplanning able to exploit early information generated by each customer during its purchasing process, information that otherwise would be lost. This marked advantage comes to the detriment of an increased effort of integration between Sales and Manufacturing, especially for controlling the slack created to handle uncertainty.The paper first infers the principles and procedures of order overplanning by analysing the case study of an Italian telecommunications manufacturer. Then, it discusses the main advantages and disadvantages of this method, in order to identify the main factors affecting its performances and to determine the planning environments where it fits coherently.     

When culture meets digital platforms: value creation and stakeholders’ alignment in big data use

Research on big data has highlighted that a crucial element to create value from data is the capability of aligning different stakeholders’ interests. However, it has not yet been investigated empirically how this process of alignment can be realized. We conduct a multiple case study on the two leading platforms involved in the online dissemination of cultural heritage – Europeana and Google Arts & Culture. Our findings reveal that a platform overtakes a rival one when it turns on multiple drivers of value creation in such a way that the drivers contribute to realigning the interests expressed by the stakeholders whose strategic objectives and beliefs were formerly divergent – or simply unrelated – to each other. This capability of realigning different stakeholders’ interests is independent of the level of industry-specific knowledge that the platform orchestrator has. The dynamics we document imply that Google has assumed a system integration role in the cultural ecosystem. This generates new trade-offs for museums in the way they generate value for the tourism industry. The paper enriches our understanding of what strategies digital platforms adopt to create value in big data contexts and provides a base to continue the investigation on other ecosystems driven by big data.     

The Terms of Trade and the International Transfers of Productivity Gains

In international economic relations, when movements of labour are limited and fiscal redistributive policies non-existent, changes in the terms of trade (the ratio between the prices of exports and imports) are the main driving force for the international redistribution of incomes or of productivity gains. The concept of productivity flows linked to price changes can be extended from the interindustry framework to deal with international relations bringing some new insights into the terms of trade issues. The paper develops a conceptual framework for the computation of international flows of productivity gains, taking into consideration the role of exchange rates and the meaning of Purchasing Power Parities. It is completed by a set of computations on Swiss relations with the rest of the world.