Wealth and Income Inequality in Europe

While it has long been apparent that global levels of wealth and income inequality have been steadily increasing since the 1970s, the issue received scant attention in Europe until the recent fi nancial crisis and the resulting Great Recession illuminated for the general public just how great the chasm between the very rich and everybody else had grown. This realisation was coupled with an increased focus on inequality among economists and other academics, leading to a fresh drive for policy ideas to remedy the alarming trend. This Forum comprises a diverse range of viewpoints on the recent history and dynamics of inequality within Europe, each striving to defi ne the root causes in the various countries being examined. The defi nition of these causes, of course, can inform the direction of policies aimed at alleviating the growing inequality in many European countries and thereby curtail one of the major political and social issues of our time.     

Small Enterprise Default Prediction Modeling through Artificial Neural Networks: An Empirical Analysis of Italian Small Enterprises

Having accurate company default prediction models is vital for both banks and enterprises, especially small enterprises (SEs). These firms represent a vital part in the economy of every country but are also typically more informationally opaque than large corporations. Therefore, these models should be precise but also easily adaptable to suit SE characteristics. Our study applies artificial neural networks (ANNs) to a sample of over 7,000 Italian SEs. Results show that (1) when compared with traditional methods, ANNs can make a better contribution to SE credit‐risk evaluation; and (2) when the model is separately calculated according to size, geographical area, and business sector, ANNs prediction accuracy is markedly higher for the smallest sized firms and for firms operating in Central Italy.     

A Social Dimension for a New Industrial Strategy for Europe

Intereconomics - The impact of the COVID-19 pandemic has not been equal across economic sectors, age groups, education levels and employment status.     

Fair wages,labor relations and asset returns

The paper investigates the nexus between labor and financial markets, focusing on how labor union’s attitude in the wage-setting process and the firm’s investment strategy affect asset returns. We assume that the labor union’s relative preferences between wage and employment depend on selected measures of firm’s financial performance. The paper shows that if the labor union ties its preference for wage to the firm’s dividends (or to any other quantity measuring available liquidity), then the volatility of the firm’s returns increases. Consequently, equities have to grant high expected returns in order to remunerate the increased volatility. This mechanism offers an explanation for the “equity premium” (that is the difference between the equity return rate and the risk free rate). It is a welcome result that the simulated excess return is about the empirical estimate and that it is obtained with a plausibly low parameterization of the shareholders’ risk aversion.     

The Stabilisation of LDCs' Export Earnings. The impact of the EU STABEX programme

As part of the Lome Convention the STABEX programme is one of the instruments of the European Union's development policy. Its objective is to reduce the instability of the agricultural export earnings of the developing countries which signed the agreement. By working on a commodity-by-commodity basis, this paper provides an empirical evaluation of the effects of the financial transfers disbursed by the EU. The results obtained are substantially different from those by other authors because it is shown that STABEX does have a positive impact on the sectors in which the drop of export earnings occurred. Furthermore, it is argued that the delay concerning the payments in favour of the African Caribbean and Pacific countries (henceforth ACPs) influences the effectiveness of STABEX, even if no conclusive evidence has been found to support the widely shared opinion that the relationship between these two variables (impact of the transfers and their delays) is negative.     

Wage Indexation, Employment and Inflation

Price versus productivity-indexing is considered in a model of monetary policy with incomplete information and wage bargaining. In a perfectly price-indexed economy, the inflationary bias due to lack of credibility is eliminated. However, productivity-indexing is more appropriate to dampen macroeconomic fluctuations that are caused by real disturbances. We show that productivity-indexing alone guarantees both price and employment stability, provided the government's reputation is good enough and the union's bargaining power is not too strong. This reduces the degree of price indexation as the union becomes weaker and the government's reputation improves. Productivity-indexing is desirable with volatile productivity processes and weak unions.
JEL classification : E 24; E 52     

The spatial coverage of shipping lines and container terminal operators

The aim of this paper is to provide a quantitative basis for the discussions about globalization of carriers and container terminal operators. A measuring framework is developed that allows for the comparison of the distribution of ship carrying capacity across various regions, and the comparison of the distribution of terminal throughput worldwide. This approach also allows the investigation of the degree to which liner shipping networks match related terminal portfolios.The main outcomes highlight significant differences between the geographical scope of liner networks, and between the coverage of corresponding terminal portfolios. Interesting results emerge from the matching of networks of integrated operators: early-movers such as Maersk and latecomers such as MSC have very different levels of vertical integration.     

Healthcare resource utilization among patients with relapsed multiple myeloma in the UK,France, and Italy

Aims: To assess the real-world healthcare resource utilization (HRU) and costs associated with different treatment regimens used in the management of patients with relapsed multiple myeloma in the UK, France, and Italy.

Methods: Retrospective medical chart review of characteristics, time to progression, level of response, HRU during treatment, and adverse events (AEs). Data collection started on June 1, 2015 and was completed on July 15, 2015. In the 3 months before record abstraction, eligible patients had either disease progression after receiving one of their country’s most commonly prescribed regimens or had received the best supportive care and died. Costs were calculated based on HRU and country-specific diagnosis-related group and/or unit reference costs, amongst other standard resources.

Results: Physicians provided data for 1,282 patients (387 in the UK, 502 in France, 393 in Italy) who met the inclusion criteria. Mean [median] total healthcare costs associated with a single line of treatment were €51,717 [35,951] in the UK, €37,009 [32,538] for France, and €34,496 [42,342] for Italy, driven largely by anti-myeloma medications costs (contributing 95.0%, 90.0%, and 94.2% of total cost, respectively). During active treatment, the highest costs were associated with lenalidomide- and pomalidomide-based regimens. Mean cost per month was lowest for patients achieving a very good partial response or better. Unscheduled events (i.e. not considered part of routine management, whether or not related to multiple myeloma, such as unscheduled hospitalization, AEs, fractures) accounted for 1–9% of total costs and were highest for bendamustine.

Limitations: The use of retrospective data means that clinical practice (e.g. use of medical procedures, evaluation of treatment response) is not standardized across participating countries/centers, and some data (e.g. low-grade AEs) may be incomplete or differently adjudicated/reported. The centers involved may not be fully representative of national practice.

Conclusions: Drug costs are the main contributor to total HRU costs associated with multiple myeloma. The duration of active treatment may influence the average total costs, as well as response, associated with a single line of therapy. Improved treatment outcomes, and reductions in unscheduled events and concomitant medication use may, therefore, reduce the overall HRU and related costs of care in multiple myeloma.