A Poverty Trap of Crime and Unemployment

We present an overlapping generation growth model with an imperfect labor market where the links among crime, growth and unemployment are jointly considered, both in an endogenous and exogenous set‐up. We test the major implications of our theory and verify the two model specifications through the Italian regional data, using the Pooled Mean Group estimator proposed by Pesaran, Shin and Smith (1999 ). The empirical results are in favor of the exogenous version of the model and suggest that crime and unemployment have long‐run income level effects.     

NATURAL ADVANTAGE EFFECT, LOCATION AND TRADE PATTERNS IN INCREASING RETURNS TO SCALE INDUSTRIES

In a two sectors, two regions economy I show that the higher the increasing returns to scale of an industry, the more easily it will concentrate in response to natural advantage (giving rise to what I call Natural Advantage Effect). To this end, one sector is assumed to be perfectly competitive and the other is monopolistically competitive, with a region's firms producing at a lower marginal cost than the others in the monopolistic sector (or equivalently producing varieties more intensely demanded by consumers). If capital is mobile between regions in the long run, I analytically characterize the process of industrial location of the imperfectly competitive sector in the region with the natural advantage.     

Structure of the labour market and wage inequality: evidence from European countries

The aim of this paper is to explore how the structural changes that have occurred in the labour market, in terms of employment composition by skill levels, affect wage inequality in three developed countries of Western Europe that are in close geographical proximity but have disparities in their labour market characteristics. More precisely, the analysis compares, from an international perspective, France, Germany—whose labour markets have been characterised in recent years by job polarization and the upgrading of occupations, respectively—and Italy, where neither of the two phenomena can be clearly identified. Using EU-SILC (European Union—Survey on Income and Living Conditions) data, in the first step, RIF-regression (Recentered Influence Function) enables an exploration on the primary factors that are likely to explain the differences in generating personal labour earnings and, in the second step, a decomposition of the change in wage inequality between 2005 and 2013 to evaluate how much of the overall gap is accounted for by the endowments in employees’ individual characteristics (composition effect) rather than the capability of labour markets to transform these characteristics into job opportunities and earnings (wage structure). Regarding France and Germany, the main results highlight how the endowment effect plays a key role in decreasing or, at least, not increasing wage inequality, whereas in Italy the rising inequality may be due to the lower efficiency of the country’s labour market in creating job opportunities, better job-related careers, and higher-salaries for employees.     

AN OBTRUSIVE REMARK ON CAPITAL AND COMPARATIVE STATICS

We present a simple comparative statics analysis of steady‐state equilibria in overlapping generations economies with capital accumulation. We regard comparative statics as paradoxical whenever an exogenous increase in saving propensity induces a decrease (an increase) in consumption at the steady state when interest rate is positive (negative). It is shown that there is an exact relation between paradoxical comparative statics and a perverse intersection of properly identified curves of demand for and supply of capital in value. The demand curve for capital in value coincides with that of neo‐Ricardian analysis. We relate our conclusions to some old and recent issues in capital theory.     

Capital accumulation and real exchange rate behavior in a small open economy with credit market frictions

Summary. We consider the nature of the relationship between the real exchange rate and capital formation. We present a model of a small open economy that produces and consumes two goods, one tradable and one not. Domestic residents can borrow and lend abroad, and costly state verification (CSV) is a source of frictions in domestic credit markets. The real exchange rate matters for capital accumulation because it affects the␣potential for investors to provide internal finance, which mitigates the CSV problem. We demonstrate that the real exchange rate must monotonically approach its steady state level. However, capital accumulation need not be monotonic and real exchange rate appreciation can be associated with either a rising or a falling capital stock. The relationship between world financial market conditions and the real exchange rate is also investigated. Received: October 3, 1997; revised version: October 23, 1997     

Customer Attitude and Dispositions Towards Customized Products: The Interaction Between Customization Model and Brand

Despite increasing interest in customization-related topics, little is known about the relation between customization and brand. The authors identify two main archetypes of product customization based on the degrees of freedom given to the customer in the design process: Combination-based Customization (CbC), which is the selection of product modules provided by the company, and Integration-based Customization (IbC), which is product customization by means of signs and symbols provided by the customer. The authors propose that customer attitude and dispositions towards CbC and IbC depend on the presence/absence of a mass brand logo upon the product. Results of three studies, based on web toolkits for t-shirt and trolley bag customization, demonstrate that in the presence of a mass brand logo CbC shows higher customer attitude and dispositions than IbC. In the absence of a mass brand logo, the opposite pattern holds. Additional findings show, however, that the advantage of CbC over IbC for branded products disappears when there is high congruence between the customer self and the brand, and when creative brands are considered.