The pyramid of Okun’s coefficient for Italy

Our aim is to propose a pyramid of Okun’s coefficient by age and gender in the Italian labour force using a varying-coefficient model. The unemployment rate by age and gender—useful information for estimating Okun’s relationship—is not available for Italy from official statistics. Therefore, we provide an estimation of the indicator using microdata for the 2005–2014 period from ISTAT, the Italian labour force survey. Okun’s law is investigated using two measures of the unemployment rate: a traditional measure based on a labour force with and without work experience, and a new measure restricted to the labour force with experience. When Okun’s relationship is estimated using the unemployment rate restricted to the labour force with experience, the young population is less sensitive to business cycles. As the workforce ages, this gap in sensitivity tends to shrink. We also found that there are no significant differences by gender in the magnitude of Okun’s coefficient among the youngest population when considering the unemployment rate restricted to the labour force with experience.     

Competition in the Portuguese economy: insights from a profit elasticity approach

The article uses the elasticity of profits to marginal costs, as in Boone (Econ J 111:1245–1261, 2008b), to measure the degree of competition in the Portuguese economy in a period characterised by the reallocation of resources towards the non-tradable sector and the accumulation of macroeconomic imbalances. Using firm-level data for the period 2000–2009, we find that there is lower competition intensity in the non-tradable sector. The least competitive markets within this sector lay in professional services, network industries and segments of retail trade. We also find that reductions in competition intensity are relatively widespread in the economy, but in terms of sales, gross value added and employment they are more substantial in the non-tradable sector. Results suggest that some network industries and other services exhibit low and a declining competition intensity in the period under analysis. In addition, the article discusses the coherence of the profit elasticity with classic indicators of market power, such as the Herfindahl–Hirschman index and the price-cost margin, and find that in more than half of the markets there is an agreement in the dynamics of competition intensity.     

Intergenerational occupational dynamics before and during the recent crisis in Spain

The relationship between the socio-economic status of parents and children is referred to by the literature as intergenerational social mobility. Low mobility implies that human capital, skills and talent can be misallocated. As a consequence, the workers’ efforts, their motivation and productivity could be negatively affected, causing adverse effects on economy growth and competitiveness. This paper attempts to study the evolution of intergenerational social mobility before and during the recent economic crisis in Spain. The methodology applied consists in analysing the movements along the occupational scale of children with respect to their parents. This involves associating the National Classification of Occupations with the New International Socio-economic Index of Occupational Status. Statistic and econometric methods are used to assess these occupational transitions and to analyse the covariates’ effects on them. Data used corresponds to the 2005 and 2011 Living Condition Survey (INE 2005, 2011).     

Monetary policy implications of short-term capital flows in Turkey

The advent of global financial crisis in 2008, unleashed volatile short term capital flows to the emerging markets. This has forced many central banks in the developing world to adopt innovative policy measures to address concerns related to financial instability caused by the volatile nature of capital flows. In 2010 Turkish Central Bank included financial stability in addition to price stability as one of primary goals of its monetary policy. Several macro-prudential measures had been taken and ‘corridor system’ of setting the short-term policy rates had been introduced. In this paper, we have estimated an extended Taylor rule, using error correction model, to examine the impact of global financial factors in impacting the setting up of the policy rate in the pre and post 2010 periods in Turkey. It has been found that in the post-2010 period, global financial factors and monetary policy stance of the core economy, USA, have become major factor(s) in shaping up the monetary policy. Particularly our results of variance decomposition show that global financial indicators such as, VIX and EMBI have taken prominence in the setting of the short-term policy rate. This has not only made the domestic monetary more dependent on external factors but has also made pro-cyclical in nature.     

Context matters

Eliciting the level of risk aversion of experimental subjects is of crucial concern to experimenters. In the literature there are a variety of methods used for such elicitation; the concern of the experiment reported in this paper is to compare them. The methods we investigate are the following: Holt–Laury price lists; pairwise choices, the Becker–DeGroot–Marschak method; allocation questions. Clearly their relative efficiency in measuring risk aversion depends upon the numbers of questions asked; but the method itself may well influence the estimated risk-aversion. While it is impossible to determine a ‘best’ method (as the truth is unknown) we can look at the differences between the different methods. We carried out an experiment in four parts, corresponding to the four different methods, with 96 subjects. In analysing the data our methodology involves fitting preference functionals; we use four, Expected Utility and Rank-Dependent Expected Utility, each combined with either a CRRA or a CARA utility function. Our results show that the inferred level of risk aversion is more sensitive to the elicitation method than to the assumed-true preference functional. Experimenters should worry most about context.     

A research agenda for disaster entrepreneurship

This paper addresses questions raised by Storr, Haeffele-Balch and Grube in their book Community Revival in the Wake of Disaster: Lessons in Local Entrepreneurship (2015). I review the reasons why the book is timely, especially the rising number and costs of disasters globally and the shifting norms on the role of government in disaster management. Social capital serves as a critical engine for resilience to crisis, and I move to demonstrate its importance in the mitigation and recovery stages. Then, I raise a research agenda based on their writings, focusing on building quantitative evidence to match the qualitative data already gathered by the authors. Specifically, I focus on testing claims about the definition and density of entrepreneurs, the role of polycentricity, and the public policy pools that would build entrepreneurial talent in vulnerable communities.     

The classical roots of the Austrian theory of capital and entrepreneurship

The paper deals with the continuities and discontinuities between some classical, Austrian and neo-Austrian authors with regard first to the theory of capital and then to the theory of entrepreneurship. Part I focuses on the elements of continuity between the classical and the Austrian theory of capital. These elements have been singled out by dealing first with the distinction between individual and national capital; and then with the difference between the resulting circulating-fixed capital and free-invested capital distinctions in the light, first, of the concept of roundaboutness and, then, of the method of vertical integration. Part II focuses on the elements of continuity between the Austrian theory of individual behaviour and the classical theory of national wealth. The distinctions between logical and historical time and between economics of time and economics in time are used to assess the links between the theory of capital as developed by the classics and Böhm-Bawerk, on the one hand, and the theory of entrepreneurship as developed by the neo-Austrians, on the other.     

Does a one-size-fits-all approach to financial regulations alleviate default risk? The case of dual banking systems

Financial regulations are developed to curb financial and economic fragility costs without undermining the economic contributions of banks to economic development. To understand the impact financial regulations have on reducing the financial fragility of banks we use the probability-of-default of banks as a proxy for bank failure. After analyzing data collected from 15 countries with a dual banking system for the period 2000–2015, we find convincing evidence that not all financial regulations have risk-reducing benefits for banks and the impact of financial regulations on default risk is not the same for conventional banks (CBs) and Islamic banks (IBs). The empirical evidence suggests that regulations that lessen overall default risk have a greater impact on IBs while those increasing default risk have a greater impact on CBs. Based on our findings we recommend that regulators should consider the different natures of CBs and IBs and tailor financial regulations to suit these operationally distinct financial intermediaries.