Keeping up by robbing the Joneses

In this article, we find evidence of a ‘keeping up with the Joneses’ effect in the relationship between inequality and crime in Italy. We use data on minor and major crimes in the 20 Italian regions in the years 2004–2015 and show that for higher (lower) income levels, inequality leads individuals to commit major (minor) crimes to try to keep up with richer people.     

Is there a trade-off between free capital mobility,financial stability and fiscal policy flexibility in the EMU?

The recent dynamics characterizing the Eurozone economy suggest the existence of a new policy trilemma faced by its member countries. According to this policy trilemma, there is a trade-off between free capital mobility, financial stability and fiscal policy flexibility. In this paper, we analyze the foundations of such a trade-off and, based on the data for 11 Eurozone countries, present an empirical investigation on the existence of the trilemma. The results highlight the existence of the trade-off, with some differences between member countries. The existence of this trilemma in the Eurozone provides arguments for implementing centralized financial supervision together with fiscal and monetary reforms that should strengthen the currency union.     

Alternative Strategies for Monetary Policy

The aim of the paper is to emphasize the importance of the central bank's alternative strategies for macroeconomic equilibrium. Using a constrained maximization process founded on a behavioural equation, we underscore the relevance, for monetary policy, of the assumptions adopted by policymakers regarding how the economic system works. In particular, under a flexible exchange rate regime, the relevant hypotheses are those concerning the supply curve. Under a fixed exchange rate regime the relevant assumptions are those related to the maintenance of the currency agreements and to the internal sustainability of an interest rate setting policy. We demonstrate that these hypotheses define the objective pursued and the strategy followed. Furthermore, if they do not coincide with the actual characteristics of the market, the adjustment dynamics of aggregate income and inflation do not allow convergence toward equilibrium. We use the tools of New Consensus Macroeconomics to discuss the implications of the model and to offer an enhanced analytical framework for teaching intermediate macroeconomics without necessarily adopting the mainstream hypotheses.     

The Effect of Fiscal Decentralization on Corruption: A Non‐linear Hypothesis

This study advances the literature on the effect of decentralization on corruption by proposing a theoretical motivation for the hypothesis that the corruption‐minimizing decentralization arrangement prescribes intermediate decentralization degrees: a ‘middle’ decision‐making power of local governors may mitigate the tradeoff between the rent‐seeking incentive for local politicians and the effectiveness of their voters’ monitoring. The estimation of a non‐linear empirical model strongly confirms that a decentralization degree between 15% and 21% minimizes corruption even through different estimation procedures, introduction of control variables and the use of internal and external IV and of alternative decentralization and corruption measurements.     

How do firms combine different internationalisation modes? A multivariate probit approach

Most of the literature on the relationship between firm’s participation in international markets and firm heterogeneity focuses on export and foreign direct investment. This paper considers a wider range of forms of internationalisation that firms could combine into different patterns. With the purpose of analysing the selection of heterogeneous firms into different internationalisation patterns, we jointly model the decisions on the forms of internationalisation through a multivariate probit. This model allows us to avoid any a priori assumption about the firm’s behaviour. In this context we study the complementarity/substitutability relationships between forms of internationalisation. The results obtained show that: (i) neglecting some forms could lead to an incomplete representation about the firm’s internationalisation strategy, (ii) different firm’s characteristics influence the choice of internationalisation pattern, i.e. some types of firm are more prone to choosing one type of process over another, (iii) complementarity between forms of internationalisation seems to be preferred over substitution, but some heterogeneity also arises in this context.     

The FairWear Campaign: An Ethical Network in the Australian Garment Industry

In many parts of the world, homework is a form of labour characterised by precariousness, lack of regulation, and invisibility and lack of protection of the workers who are often amongst the world’s poorest and most exploited. Homework is spreading, due to firm practices such as outsourcing. The analysis and understanding of complex corporate networks may assist with the identification and protection of those most at risk within the supply chain network. It can also expose some of the key ethical issues and dilemmas of supply chain management and corporate social responsibility (CSR). Based on a case-study of the Australian FairWear Campaign (FWC), this article identifies an ethical network that aims to increase corporate accountability (CA) via greater transparency in corporate supply chains and improve work conditions for homeworkers and increase their recognition in the supply chain.     

MEASURING SUB‐NATIONAL INCOME POVERTY BY USING A SMALL AREA MULTIVARIATE APPROACH

The present paper proposes a statistical strategy for the analysis of regional disparities in income poverty. For the EU countries, information on individual income has been collected until now by the European Community Household Panel survey, which only yields reliable estimates for very large regions within countries. In order to obtain reliable estimates for some of the poverty indicators suggested by the Laeken Council at the sub‐national level, we suggest the adoption of a multivariate small area estimation approach which enables us to reduce estimate variability. We concentrate on Italy, the country with the lowest degree of regional cohesion within the EU. Results show that disparity cannot be reduced to the so‐called “North–South divide,” with the “poor” South separated from the “affluent” North, as both these macro‐regions display large internal differences in terms of both poverty level and income inequality. The strategy we propose could also be adopted in order to measure poverty in other European regions, using information produced by the new EU Survey on Income and Living Conditions, which is replacing the European Community Household Panel.     

A Micro‐Econometric Analysis of the Antipoverty Effect of Social Cash Transfers in Italy

We analyze the anti‐poverty effect of social cash transfers using a micro‐econometric approach. Aggregate analyses, based on comparing average poverty indicators before and after public transfers, fail to address who receives the transfers and how the transfers are distributed among the poor. We consider three dichotomous outcome variables: (i) poverty status before the receipt of transfers; (ii) the receipt of transfers; and (iii) poverty status after the receipt of transfers. We use a trivariate probit model with sample selection, connecting the outcome variables to the characteristics of the household and its head. Our empirical results highlight that the Italian social transfers system overprotects certain household typologies at the expense of others, as social transfers are primarily awarded to employees with permanent positions and the elderly, while the system is not generous enough to large households with dependant children, the self‐employed, temporary contract workers, and the unemployed.