“Managing” the ultimate resource

Human intelligence is the ultimate resource. Even so, the use of the word “resource” is misleading if it makes people think of managing intelligence as they would manage minerals, trees, or livestock. If the ultimate resource is to benefit humanity, we must recognize that it works effectively only when it is free. Restricting people's freedom in order to “manage” them more “effectively” is a recipe for disaster.     

Cluster analysis of cross impact model scenarios

Analysis of outputs of cross impact models often focuses on counts of frequency of occurence of events, and frequency of co-occurence of events, to estimate the probabilities of these events. This paper describes an additional analysis which can be performed on the output of a cross impact model. Individual output scenarios are clustered together on the basis of similarity, utilizing standard techniques of cluster analysis. The resulting clusters of similar scenarios can be viewed as “typical” scenarios and analyzed in terms of how much they differ from the overall average for the complete set of output scenarios. Analysis of the reasons for these differences helps identify critical events and significant relationships among events. The paper discusses the clustering algorithm used and the type of output to be expected.     

Italian Lessons on the Welfare State

The growth of government in Italy provides a stark warning of the dangers of the spirolling costs of the welfare state. Antonio Martino Professor of Monetary History and Policy at the University of Rome, examines how the machinery of the state develops its own momentom and wams that the Italian example suggests democratic govement may be imperilled unless measures are taken to tome Leviathan.     

What to show on the wine labels: a hedonic analysis of price drivers of Sicilian wines

Unlike previous literature, we construct a hedonic model of wine price that incorporates all the main categories of variables simultaneously to enable a better evaluation of their importance on wine price formation. A comprehensive model has the advantage of providing more reliable estimates of the attributes' implicit prices thereby facilitating firms' pricing and improving effectiveness of wine production and marketing decisions. We utilize two different datasets of Sicilian wines collecting data from influential wine guides. Our results suggest that wine price strongly depends on objective features such as vintage, alcoholic content, geographical origin, grape variety, producer size and cellaring potential. In addition, use of containers like tonneaux and barrique positively affects prices, whereas use of concrete containers has a negative influence. No univocal indications emerge with regard to the effect of the type of company, type of viticulture and firm age. As for sensorial characteristics, our analysis provides novel evidence of the importance of olfactory variables such as aroma intensity and the presence of particular smells in the wine. Finally, current guides’ grades and firm reputation play a crucial role in determining wine prices as well.     

Long versus short time scales: the rough dilemma and beyond

Decisions in Economics and Finance - Using a large dataset on major FX rates, we test the robustness of the rough fractional volatility model over different time scales, by including smoothing and...     

Calibration to FX triangles of the 4/2 model under the benchmark approach

Decisions in Economics and Finance - We calibrate a novel multifactor stochastic volatility model that includes as special cases the Heston-based model of De Col et al. (J Bank Finance...