Lagged duration dependence in mixed proportional hazard models

We study the identification of a mixed proportional hazard model with lagged duration dependence when data provide multiple outcomes per stratum. Within strata variation is exploited to non-parametrically identify lagged duration dependence in more general models than in the literature.     

Temperature,rainfall and economic growth in Africa

Following a recent line of research, this paper investigates the aggregated effects of temperature and rainfall on economic growth in Africa. Our econometric approach is based on a reduced-form model and takes account explicitly of parameter heterogeneity and cross section dependence, relying on ARDL modelling and panel estimators with multifactor structures. We find clear supportive evidence of short- and long-run relations between temperature and per-capita GDP growth, while the role played by rainfall appears to be less important and the evidence on its statistical significance is less clear-cut. Very similar results are reported when the analysis is carried out by focusing solely on Sub-Saharan African countries or considering GDP growth per worker. This evidence is in sharp contrast to the results obtained via standard MG estimation and this confirms that, by not controlling for cross section dependence, traditional panel estimators are likely to provide misleading inference. The empirical results suggest that, far from adapting quickly to weather shocks, African economies appear to be significantly damaged by them. In the absence of corrective measures, the current trends in climate change may impose a progressively heavier burden on African countries.     

Geopolitical risks and stock market dynamics of the BRICS

This paper examines the effect of geopolitical uncertainty on return and volatility dynamics in the BRICS stock markets via nonparametric causality-in-quantiles tests. The effect of geopolitical risks (GPRs) is found to be heterogeneous across the BRICS stock markets, suggesting that news regarding geopolitical tensions do not affect return dynamics in these markets in a uniform way. GPRs are generally found to impact stock market volatility measures rather than returns, and often at return quantiles below the median, indicating the role of GPRs as a driver of bad volatility in these markets. While Russia bears the greatest risk exposure to GPRs in terms of both return and volatility, India is found to be the most resilient BRICS nation in the group. Noting that geopolitical shocks and in particular terrorist incidents are largely unanticipated, our findings underscore the importance of a strong financial sector that can help return the market to stability and an open economy that allows local investors to diversify country-specific risks in their portfolios.     

Bootstrap prediction intervals for autoregressions: some alternatives

A new method is proposed to obtain interval forecasts for autoregressive models taking into account the variability due to the estimation of the order and the parameters. The procedure improves that introduced by Masarotto (1990), allows a substantial reduction of the variance of the predictive distribution percentile estimators and should thus be considered as a useful alternative to the classic Box and Jenkins interval forecast. The method uses the bootstrap technique and is distribution-free. An empirical application is considered.     

Health Systems and Health Reform in Europe

The organisation of health care differs widely across Europe. Access to services, financing schemes, incentives for better care, and administrative efficiency are challenges that are being dealt with in a variety of ways. Are insurance-based systems the best solution for balancing resources and services or are national health funds preferable? Does the introduction of competition fulfil high hopes for better service at lower costs? What are the relative advantages and drawbacks of central and local management of health care?     

Fiscal Foresight,Limited Information and the Effects of Government Spending Shocks

We quantify the impact of government spending shocks in the US. Thereby, we control for fiscal foresight, a specific limited information problem (LIP) by utilizing the narrative approach. Moreover, we surmount the generic LIP inherent in vector autoregressions (VARs) by a factor‐augmented VAR (FAVAR) approach. We find that a positive deficit‐financed defence shock raises output by more than in a VAR (e.g. 2.61 vs. 2.04 for peak multipliers). Furthermore, our evidence suggests that consumption is crowded in. These results are robust to variants of controlling for fiscal foresight and reveal the crucial role of the LIP in fiscal VARs.     

Services Input Intensity and US Manufacturing Employment Responses to the China Shock

Review of Industrial Organization - We present industry-level evidence that manufacturing sectors that make use of services as inputs more intensively are more robust to shocks from import...     

Innovation policy in progress. Institutional intermediation in public procurement of innovation: satellite telecommunications in Italy

This paper aims to explore a mechanism of institutional intermediation to sustain public procurement of innovation. By exploring the development of innovative solutions for telecommunications satellites in Italy, this study proposes an analytical view on the role of supporting institutions in public procurement of innovation and discusses the relation between the source of public demand and the contracting companies. Eventually, it argues that a public agency can manage funds, coordinate companies’ technological capabilities, and stimulate a sense of cooperation to achieve innovation. The research finds originality in bringing the growing theory concerning public procurement into a dynamic institutional setting to discuss the emerging role of the public competent costumer. The case-analysis shows how institutionalization of an innovation intermediary enables efficient procurement. Propositions prescribe powerful instruments for dealing with market uncertainty and technological complexity, and find the agency to act as a knowledge intermediary and companies coordinator.