The European debt crisis and fiscal reactions in Europe 2000–2014

After the outbreak of the global financial crisis, some governments in the EU experienced serious fiscal problems, while others were less affected. This paper seeks to shed light on the divergent fiscal performance in the EU countries before and after the outbreak of the crisis. Fiscal reaction functions of the primary balance are estimated for different groups of EU countries using quarterly data for the pre-crisis period 2001–2008 and for the crisis period 2009–2014. The pre-crisis estimations reveal some differences in persistence and cyclical reaction between different groups of countries, but in most cases little feedback from the debt stock to the primary balance. The fiscal reaction functions of the countries that eventually developed fiscal problems do not stand out. The estimations on data from the crisis period show largely unchanged persistence and counter-cyclicality but much more feedback from the debt stock, and this applies both to the crisis countries and those less affected. In spite of large deficits and accumulation of debt, the underlying fiscal reaction has become more prudent after the outbreak of the European debt crisis.     

Globalisation and Poverty in Latin America: Some Channels and Some Evidence

This paper provides an overview of the main mechanisms through which globalisation can affect poverty and household welfare in Latin America and presents supporting evidence from different case studies in the region. One case study explores the impacts of agricultural trade liberalisation in world markets on poverty in Argentina, with an emphasis on labour income effects via real wages. The second case study examines the impacts of CAFTA on net producers and net consumers among the indigenous population in Guatemala. The analysis explores short‐run impacts as well as medium‐run impacts as households adjust farm decisions. Finally, a last exercise is set up to study the role of agricultural liberalisation on wages, employment and unemployment when there are frictions in labour markets. These case studies show that the impacts of trade on developing countries are heterogeneous. In Argentina, there are gains from liberalisation of world agriculture and higher food prices. In Guatemala, instead, the indigenous population would benefit from lower food prices. It is clear that household adjustments and complementary factors are fundamental ingredients of any reasonable evaluation of the welfare impacts of trade reforms.     

Preserving Knowledge on IS Business Value

The economic relevance of information systems has been studied for many years and has attracted an abundance of research papers. However, the “productivity paradoxon” of the 1990s, Carr’s widely recognized paper “IT doesn’t matter”, and several studies that do not find a positive correlation between IS investments and economic performance reveal long-lasting difficulties for IS researchers to explain “IS business value”. Business executives and researchers also continue to question the value of IS investments. This raises the question of whether literature reviews have tapped their potential to address the concerns by covering key research areas of IS business value and preserving their key findings. In order to address this question, this paper identifies and describes 12 key research areas, and synthesizes what literature reviews published in pertinent academic outlets have done to preserve knowledge. The analysis of 22 literature reviews shows that some crucial areas have not been (sufficiently) covered. They provide fertile areas for future literature reviews. As this work is based on the results of more than 200 research papers, it is capable of drawing a comprehensive picture of the current state-of-the-art in IS business value research.     

Europe’s energy policy and the task ahead

The oil shock of 1973 and the subsequent world recession have drastically demonstrated the weakness of countries dependent on external energy supplies. In the following, Guido Brunner, the competent Member of the Commission of the European Communities, describes the changes we are facing in the energy field and what the Community is doing to face up to them.     

Agro-Manufactured Export Prices, Wages and Unemployment

This article estimates the impacts of world agricultural trade liberalization on wages and unemployment in Argentina in the presence of individual labor supply responses and adjustment costs in labor demand. After a 10% increase in agro-manufactured export prices, I find that: ( a ) the employment probability would increase by 1.36 percentage points, matched by a decline in the unemployment probability of 0.75 percentage points and an increase in labor market participation of 0.61 percentage points; ( b ) the unemployment rate would decline by 1.23 percentage points; ( c ) expected wages would increase by 10.3%, mostly due to higher employment probabilities.     

Forecasting monthly industrial production in real-time: from single equations to factor-based models

The aim of this paper is to analyze the performance of alternative forecasting methods to predict the index of industrial production in Italy from 1 to 3 months ahead. We use twelve different models, from simple ARIMA to dynamic factor models exploiting the timely information of up to 110 short-term indicators, both qualitative and quantitative. This allows to assess the relevance for the forecasting practice of alternative combinations of types of data (real-time and latest available), estimation methods and periods. Out-of-sample predictive ability tests stress the relevance of more indicators in disaggregate models over sample periods covering a complete business cycle (about 7 years in Italy). Our findings downgrade the emphasis on both the estimation method and data revision issues. In line with the classical “average puzzle”, the use of simple averages of alternative forecasts often improves the predictive ability of their single components, mainly over short horizons. Finally, selected indicators and factor-based models always perform significantly better than ARIMA models, suggesting that the short-run indicator signal always dominates the noise component. On this regard, selected indicators models can further increase the amount of signal extracted to improve up to 30–40% the short-run predictive ability of factor-based models and to forecast-encompass them.