Twin Deficits in Developing Economies

Open Economies Review - This paper provides new evidence of the existence and magnitude of the “twin deficits” in developing economies. It finds that 1 % of GDP unanticipated increase...     

Skills scarcity and export intensity

We describe a model of trade with skills-based product differentiation and non-proportional trade costs that predicts a positive correlation between firms' export intensity, the price of their exports and the wages they pay to their workers. In equilibrium, firms that employ workers with comparatively scarcer skills export a larger proportion of their output, pay higher wages and charge higher prices. In line with empirical evidence, the model predicts that trade liberalization can cause the distribution of earnings to become more polarized, with patterns that reflect the heterogeneous effects of trade liberalization on firms' export performance.     

You can't be what you can't see: The role of gender in the intergenerational transmission of entrepreneurship

In this paper, we investigate how the intergenerational transmission of entrepreneurship varies between sons and daughters and whether such a process depends on living in a country characterized by a high gender gap. Using the Survey of Health, Ageing, and Retirement in Europe data set, we find that the effect on daughters' entrepreneurial choices of having an entrepreneur as father is lower than the one on sons only in countries with a high gender gap. Moreover, it is just in countries with high gender inequality that the effect of having an entrepreneurial mother is different between sons and daughters, with the impact being positive for daughters only. We also develop an individual-level indicator of gender gap within countries that corroborates our findings, which we interpret as evidence of the presence of a role-modeling mechanism. However, we find evidence of convergence across time of the intergenerational transmission process to the gender-independent transfer typical of more gender-equal countries.     

Tax morale,fiscal capacity,and war

This paper studies the effects of mobilization for war on the development of fiscal capacity and the values of tax compliance (tax morale). We propose a dynamic setting where governments may invest resources to improve the efficiency of the fiscal apparatus and the citizens' tax morality in order to raise the necessary revenues for the defense against a threat (external or internal), and parents optimally choose to transmit their preferences of tax compliance to children. Despite fiscal capacity and tax morale are initially substitutes, we show how a dynamic complementarity may arise in equilibrium from a more efficient transmission of the values of tax compliance in countries with high fiscal capacity, and this may explain why they tend to move together over time. Under reasonable conditions, we obtain that the effect of a higher threat of war on the steady-state level of the culture of tax compliance is negative when fiscal capacity is relatively low, and positive when the latter is large. We show cross-country evidence based on war frequency, fiscal capacity, and tax morale that is consistent with the results of our theory.     

An application of Sigmoid and Double-Sigmoid functions for dynamic policyholder behaviour

Decisions in Economics and Finance - The growing relevance of risk-based valuations of insurance contracts has stimulated the extension of the traditional deterministic lapse rate models towards a...     

Hybrid dynamics of multi-species resource exploitation

Decisions in Economics and Finance - In this paper, we analyze a bio-economic model of exploitation of renewable commercial resources. To take into account the typically continuous-time modeling of...     

Industry 4.0 and circular economy: An exploratory analysis of academic and practitioners' perspectives

The union between Industry 4.0 and the circular economy (CE) appears relatively recent. In this sense, new trading zones for sharing a common scenario among academics and practitioners are needed. The paper aims to investigate the link between Industry 4.0 and the CE by understanding how Industry 4.0 can foster the impact of the CE on companies. The study proposes a broader perspective that includes thematic and content analysis gathering data on professional documents based on business cases, newspaper articles, press releases and specialised blogs, as well as scientific papers. The joint academic-practitioners view highlights how Industry 4.0 has the potential to impact on the CE through countless actions: increasing waste disposal; promoting remanufacturing; enhancing the efficiency of critical resources such as water, energy, gas and CO₂; and improving business models and the mission of companies. However, barriers still exist in its adoption, stressing the need for holistic and integrated design and a proactive environment of collaboration among stakeholders. Results lead to practical as well as research implications.     

International Fiscal-Financial Spillovers:the Effect of Fiscal Shocks on Cross-Border Bank Lending

Open Economies Review - This paper sheds new light on the degree of international fiscal-financial spillovers by investigating the effect of domestic fiscal policies on cross-border bank lending....     

Population dynamics and utilitarian criteria in the Lucas–Uzawa Model

This paper introduces population growth in the Uzawa–Lucas model, analyzing the implications of the choice of the welfare criterion on the model's outcome. Traditional growth theory assumes population growth to be exponential, but this is not a realistic assumption (see Brida and Accinelli, 2007). We model exogenous population change by a generic function of population size. We show that a unique non-trivial equilibrium exists and the economy converges towards it along a saddle path, independently of population dynamics. What is affected by the type of population dynamics is the dimension of the stable manifold, which can be one or two, and when the equilibrium is reached, which can happen in finite time or asymptotically. Moreover, we show that the choice of the utilitarian criterion will be irrelevant on the equilibrium of the model, if the steady state growth rate of population is null, as in the case of logistic population growth. Then, we show that a closed-form solution for the transitional dynamics of the economy (both in the case population dynamics is deterministic and stochastic) can be found for a certain parameter restriction.     

Global value chains participation and productivity gains for North African firms

The emergence of global value chains (GVCs) has provided some firms the opportunity to internationalize by specializing in the production of specific inputs or tasks along the chain, with a direct impact on a country’s competitiveness. China, for instance, managed to enter low value added phases in GVCs to rapidly become a major player in world trade. Against this background, this paper asks whether North Africa, given its favourable geographic position in the Mediterranean and proximity to Europe, can grab similar opportunities. In particular, it analyzes the GVCs participation of North African firms and its implications for productivity. Since the coordination of vertically fragmented production processes increasingly relies on an adequate level of quality and reliability, especially when the inputs from several stages and locations must come together in a specific way, we identify firms involved in GVCs as traders with internationally recognized quality certification. Using a propensity score matching diff-in-diff method, the paper finds that firms that enter GVCs both perform better ex ante and show additional productivity gains ex post. Results suggest that policies designed to support certifications and compliance with international standards and to increase trust between firms in different countries, represent an important tool for linking developing countries to global production networks, with possible positive consequences on their economic development and growth.