Increasing inequality,consumer credit and financial fragility in an agent based macroeconomic model

We investigate the interplay between increasing inequality and consumer credit in a complex macroeconomic system with financially fragile heterogeneous households, firms and banks. Simulation results show that there are pros and cons of introducing consumer credit: on the one hand, for a certain time, it leads to lower unemployment through boosting aggregate demand; on the other hand, it accelerates the system tendency to the crisis. Since the increase of financial profits goes with a decline of households’ real wealth, a policy trade-off emerges.     

Italy’s decline and the balance-of-payments constraint: a multicountry analysis

According to the literature, the decline experienced by the Italian economy in the last two decades depends on a slowdown of its labour productivity, starting in the 1990s. The supply-side explanations of this slowdown are inconsistent with the major stylised facts. In this paper, we verify whether a better explanation is provided by the effect of a negative demand shock, through Italy’s external constraints, in the framework of Kaldor-Dixon-Thirlwall’s cumulative growth model. To this end, we use a multi-country generalisation of Thirlwall’s balance-of-payments-constrained growth model, which allows us to investigate the contribution of Italy’s main trade partners to Italy’s long-run growth from 1970 to 2010. The trade partners are disaggregated into seven groups: Eurozone core, Eurozone periphery, United States, other European countries, OPEC countries, BRIC, and the rest of the world. The results show that Italy’s long-run growth has been consistent with the Bop-constraint, that its decline can be explained by a progressive tightening of this constraint, that the sudden slowdown of labour productivity in the 1990s corresponds to a major shock on Italy’s external constraint, and that the major contributions to this shock came, through different channels of transmission, from the core Eurozone countries and from OPEC countries.     

Enter the Dragon: Have Imports from China Hurt Wages in Manufacturing?

While it is often argued that imports from China are depressing manufacturing wages in recipient countries, this has never been tested using cross‐country data. This article investigates the effect of increased import penetration from China on the wages of workers (total, skilled and unskilled) in the manufacturing sector of 100 economies from 1976 to 2008. The econometric analysis finds no evidence suggesting that import penetration of manufactured goods from China has a statistically significant effect on real manufacturing wages (skilled, unskilled and total) in either developed or developing economies. This may be because Chinese exports are too heterogeneous to strongly affect any particular industry in recipient economies or because foreign consumers are differentiating products made in China from those made locally based on country and brand loyalty and preconceived notions of quality.     

Technological adaptation, trade, and growth

Technological Adaptation, Trade, and Growth. — Based on Grossman and Helpman’s 1991 seminal work, the authors provide a simple model extension where innovations created in the high-tech sector may be assimilated or adapted by the lowtech sector, thus generating nondecreasing returns in the production function of the latter. When applying a Heckscher-Ohlin framework the authors find that the effects of technological diffusion allow a country relatively scarce in human capital to benefit from nondecreasing rates of growth through its low-tech sector. They test this idea by using a dynamic panel data approach in order to deal with simultaneity and country heterogeneity. Their results are consistent with the predictions of the model and robust to a broad range of definitions of technological intensity.     

Online and official price indexes: Measuring Argentina's inflation

Prices collected from online retailers can be used to construct daily price indexes that complement official statistics. This paper studies their ability to match official inflation estimates in five Latin American countries, with a focus on Argentina, where official statistics have been heavily criticized in recent years. The data were collected between October 2007 and March 2011 from the largest supermarket in each country. In Brazil, Chile, Colombia, and Venezuela, online price indexes approximate both the level and main dynamics of official inflation. By contrast, Argentina's online inflation rate is nearly three times higher than the official estimate.     

Monetary Union Viability: A Criterion Proposal

We propose a model that represents the dynamic behaviour of a monetary union comprising two countries whose natural interest rates are initially unequal. This initial disparity and the subsequent application of a common monetary policy generate different national inflation rates and lead to losses of competitiveness, foreign deficits, and the indebtedness of one country with respect to the other. We propose as a viability criterion for the modelled monetary union a combination of non‐explosive foreign debt and the ability of the central bank to neutralize the contracting effects of taking on additional debt to avoid falling into a liquidity trap.     

Do Individual Preferences Affect the Environmental Decision‐Making Process in Teams? The Role of Participation

Literature on organizations and the natural environment has focused on the importance of individual managers and leaders. However, this literature has scarcely ever focused on individuals in the team context, even when teams have been considered to be key for a firms’ environmental progress. Although teams’ environmental decisions can be enriched by the different contributions of team members, it is necessary that team members actually participate and contribute their preferences during the decision‐making process. We used an adaptation of the legislative dilemma task with 84 students to contribute to environmental management literature by analyzing members’ participation during the team decision‐making process. The results of this paper show how those members with environmentally proactive preferences have a higher participation during the decision‐making process, and as a consequence they have a greater influence on the team decision. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.