The Problems of Transition, EU Enlargement, and Globalization

This paper examines how far the restructuring process toward a market system has proceeded in Transition Economies since the collapse of Communist regimes more than a decade ago, how ready these economies are for admission into the European Union, and how the globalization of the world economy is affecting them. The paper also presents a model of the restructuring process and of international trade during the restructuring process.     

International Monetary and Financial Arrangements: Present and Future

The paper deals with a broad range of topics under the rubric of the international monetary system: exchange rate agreements, International Monetary Fund structure, history and functioning of the European Monetary Union, monetary and fiscal policies adopted in recent years by different countries, with a special emphasis on central bank independence and inflation control, capital flows and cross-border assets growth and their influence on financial stability, and policy proposals to enhance financial stability. With more than four-fifths of world trade conducted under managed or full flexibility the present system can be regarded more as a flexible than a fixed exchange rate regime. EMU is a major institutional innovation; while its economic benefits have been amply discussed and perhaps exaggerated, the economic costs seem to have been underestimated. Financial liberalization has resulted in huge benefits to savers and borrowers as capital has tended to flow to its most productive uses around the world, but it has also led to fears that this has sharply reduced the effectiveness of monetary policy. This liberalization imposes a constraint on monetary policy in the sense that it forces a much higher degree of economic convergence than was true before.     

The Simpson paradox of school grading in Italy

Data from the 2003 OECD-PISA Survey for Italy reveal a striking difference in the relationship between students’ competence (as measured by PISA score in Mathematics) and school grades across regions: a competence level granting bare sufficiency in the North yields excellence grades in the South. This has spurred a lively debate on education policy in the country, based on the inference drawn from this evidence that grading practices are excessively different in the two areas. We show in this note that this inference overlooks a Simpson paradox hidden in the data. After a more careful analysis, the above inference is seen to be wrong. The crucial omitted variable is the school-level average competence: schools with low-performing students, all over the country, inflate grades. Students in the South get higher grades simply because they are in weaker schools; grading policy is actually homogeneous across regions.     

The impact of public guarantees on credit to SMEs

This article provides an in-depth evaluation of the impact of public credit guarantees to SMEs in increasing credit availability and reducing borrowing costs, without compromising their financial sustainability. Extensive econometric tests have been carried out by comparing the performance of the SMEs that benefited from such guarantees in Italy with a sample of comparable firms. The findings confirm the presence of a causal relationship between the public guarantee and the higher debt leverage of guaranteed firms, as well as their lower debt cost. Italy’s guarantee instrument has proved to be an effective instrument in these respects.

Anti-poverty competences in a multilevel government: an empirical analysis of citizens’ preferences in Europe

This article aims to investigate individuals’ perceptions about institutions that should be primarily responsible for reducing or preventing poverty, which is a dramatic phenomenon that became a crucial issue in European countries over recent years. We propose an empirical analysis based on European survey data and investigate some citizens’-level and country-level variables that potentially affect individuals’ attitudes. Our results suggest that country-level economic and institutional characteristics do significantly affect individual preferences for the governance of anti-poverty policies.     

A simultaneous equations model of internal migration with dynamic policy simulations and forecasting: Italy, 1952-1976

The purpose of this study is to determine, with a dynamic simultaneous equations model, the relative importance of the most significant socioeconomic forces leading to the large-scale labor migration from the South to the North of Italy from 1952 to 1976, and to analyze its implications for the past and prospective development of the South. The model is estimated by Full Information Maximum Likelihood, validated by dynamic simulation, stressing dynamic policy simulations, and also presenting the results of some forecasting.     

欧元美元汇率挑战预期

本文通过对欧元创设以前以及成功实施以后来自大西洋两岸学者们的不同观点的回顾，指出欧元／美元汇率变动并非如人们所预料的那样。原因在于经济模型不可能穷尽所有的基本因素，在于媒体以及其他未曾预料的事件实际上不可能使模型正常运作。     

World oil prices and O.E.C.D. trade balance

This paper develops a theoretical model which postulates that while the drop in oil prices during the 1980s has benefitted O.E.C.D. countries in a way not unlike a favorable productivity shock, the concomitant shift in oil market share from Arab or cartel core petroleum exporting countries to non-Arab or non-cartel core petroleum exporting countries, has provided less benefits to the O.E.C.D. countries than has hitherto been acknowledged. The econometric analysis lends support to the model.     

A Comparison between Formal and Informal Mutual‐credit Arrangements

We analyze under what conditions a group of potential entrepreneurs prefer to form a Rotating Savings and Credit Association (ROSCA), or a mutual‐guarantee association, which we interpret in a rotating scheme and call Rotating Savings and Collateral Association (ROSCoA). We argue that: (1) ROSCAs (ROSCoAs) are likely to be more developed in countries with high (low) bank concentration; (2) the individual flow of savings required to participate in a ROSCoA is generally lower than that needed in a ROSCA; (3) under the assumption that members share their project income at the end of each period, ROSCAs and ROsCoAs are sustainable even without the use of sanctioning mechanisms.