BOOK REVIEWS

<p>ThePrimate® [www.theprimate.it] is an HPW [High Power Web] platform which allows dynamic classification of digital resources from european databases - including those coming from Europeana - the easy retrieval of data, reuse of items and methods based on enhanced tools, a deeper layer of attached information. The platform is strictly connected to Filamento®, an original IoT [Internet of Things] framework, determining a lattice of precisely identifiable talking objects in the real environment, related as digital items in a Network of networks (NNs). The structure of graph is founded on the keys of “affinity” and “proximity”, it is modifiable according to singular needs and reusable to many different issues. The circulation of resources among the users is reinforced by an original economic paradigm based on a virtual currency, determining self- sustaining.</p

Asymmetric effect and dynamic relationships between oil prices shocks and exchange rate volatility: Evidence from some selected MENA countries

The aim of this paper is to investigate the exchange rate consequences of oil-price fluctuations across selected MENA countries (including both commodity importers and exporters) and to examine the dynamic relationship between such shocks. We employed the asymmetry of volatility through the GJR-GARCH model using daily time series data covering the period between 2001 and mi-2015. We refer to impulse responses functions in order to test the dynamic relationships. Empirical results reveal that foreign exchange market and crude oil exhibit asymmetric and no asymmetric in the return series. Additionally, the findings show asymmetric response of volatilities to positive and negative shocks. Furthermore, the results suggest that there is a dynamic relationship among oil price shocks and exchange rate volatility. Indeed, in the short run, oil prices shocks had a significant impact on exchange rate changes. Finally, we found that in the case of oil-exporting country, the oil prices rise may experience exchange rate appreciation, while, the decrease of oil price leads to appreciation of the currency of oil importing countries. This implies that oil prices are a key variable in determining the strength of the currency and its volatility. Therefore, policy makers of most MENA countries should consider exchange rate and oil price fluctuations on their macroeconomic policies and diversify more their economics

Essays on Tax Evasion and Government Spending in Developing Countries

The dissertation aims at broadening our understanding of tax evasion and government spending in developing countries. It comprises three essays. The first essay deals with estimation of tax evasion in a cross-section of developing countries by estimating their underground economies using the currency demand method. By including enforcement parameters of the tax authorities as another factor of tax evasion in the currency demand equation, it presents theory-consistent tax evasion measurement. Our estimation strategy includes the use of the Arellano-Bond dynamic panel data method that is suitable for correcting the endogeneity problem in the currency demand estimation. The study finds substantial underground economy in developing countries, ranging from 2-67 percent of GDP. The second essay is concerned with time series measurement of the underground economy in South Africa using the currency demand method. Unlike other similar studies on South Africa, it gives sufficient attention to the unit root problem that is common in time series analysis of the currency demand method. Using the Error Correction Method (ECM), it investigates the relationship between the tax rate and the currency demand, and presents yearly estimates of the underground economy for the period 1965-2002. The third essay deals with the behavior of government spending in South Africa for the period 1960-2002. Since South Africa went through various political and macroeconomic shocks during this period, we augment measures of these shocks to the standard median voter model to assess the determinants of government spending in South Africa. Using the Error Correction Method (ECM), we investigate the long-run and short-run behavior of government spending. We find that, in addition to the tax share and the income of the median voter, macroeconomic and political shocks were also significant factors in determining government spending in South Africa. This study broadens our understanding of the behavior of government spending in the presence of political and macroeconomic shocks that are common in small open developing economies

Real Output and Prices Adjustments under Different Exchange Rate Regimes

Exchange rate regimes evolution in the European transition economies refers to one of the most crucial policy decision in the beginning of the 1990s employed during the initial stages of the transition process. During the period of last two decades we may identify some crucial milestones in the exchange rate regimes evolution in the European transition economies. due to existing diversity in exchange rate arrangements in the European transition economies in the pre-ERM2 period there seems to be two big groups of countries - “peggers” (Bulgaria, Estonia, Latvia, Lithuania) and “floaters” (Czech republic, Hungary, Poland, Romania, Slovak republic, Slovenia). Despite the fact, there seems to be no real prospective alternative to euro adoption for the European transition economies, we emphasize disputable effects of sacrificing monetary sovereignty in the view of positive effects of exchange rate volatility and exchange rate based adjustments in the country experiencing sudden shifts in the business cycle. In the chapter we analyze effects of the real exchange rate volatility on real output and inflation in ten European transition economies. From estimated VAR model (recursive Cholesky decomposition is employed to identify structural shocks) we compute impulse-response functions to analyze responses of real output and inflation to negative real exchange rate shocks. Results of estimated model are discussed from a prospective of the fixed versus flexible exchange rate dilemma. To provide more rigorous insight into the problem of the exchange rate regime suitability we estimate the model for each particular country employing data for two subsequent periods 2000-2007 and 2000-2011

Why didn't the Global Financial Crisis hit Latin America?

Latin America has a rich history of financial crises. However, it was relatively unharmed by the 2007-2009 Global Financial Crisis (GFC). This paper investigates why, and in particular the role of commodity prices and its institutional framework - in line with the fourth generation financial crisis model. We set up Early Warning Systems (EWS) for Argentina, Brazil and Mexico. These consist of an ordered logit model for currency crises for the period 1990-2007 with a dynamic factor model to deal with the large number of explanatory variables. We present forecasts for the period 2008-2009. We find that international indicators play an important role in explaining currency crises in Mexico, while banking indicators and commodities explain the currency crisis in Argentina and Brazil. Furthermore, debt and domestic economy indicators are relevant for Argentina and Mexico. Finally, we observe that currency crises in all three countries are related to institutional indicators. For none of the countries the Early Warning System would have issued an early warning for the GFC.Financial crises, Early Warning Systems, Latin America, dynamic factor models, ordered logit model,

"On the Determinants of Exporters' Currency Pricing: History vs. Expectations"

The purpose of this paper is to investigate why the choice of invoice currency under exchange rate uncertainty depends not only on expectations but also on history. The analysis is motivated by the fact that the U.S. dollar has historically been the dominant vehicle currency in developing countries. The theoretical analysis is based on an open economy model of monopolistic competition. When the market is competitive enough, the exporting firms tend to set their prices not to deviate from those of the competitors. As a result, a coordination failure can lead the third currency to be a less efficient equilibrium invoice currency. The role of expectations is important in selecting the equilibrium in the static framework. However, in the dynamic model with staggered price-setting, the role of history becomes another key determinant of the equilibrium currency pricing. The role of history may dominate the role of expectations when the firms are myopic, particularly in the competitive local market. It also becomes dominant in the staggered price setting when a small fraction of the new price setters are backward-looking. The result suggests the importance of history in explaining why the firm tends to choose the US dollar as vehicle currency.

On the Determinants of Exporters' Currency Pricing: History vs. Expectations (Subsequently published in "Journal of the Japanese and International Economies", Vol.18, No.4, December 2006, pp.548-568. )

The purpose of this paper is to investigate why the choice of invoice currency under exchange rate uncertainty depends not only on expectations but also on history. The analysis is motivated by the fact that the U.S. dollar has historically been the dominant vehicle currency in developing countries. The theoretical analysis is based on an open economy model of monopolistic competition. When the market is competitive enough, the exporting firms tend to set their prices not to deviate from those of the competitors. As a result, a coordination failure can lead the third currency to be a less efficient equilibrium invoice currency. The role of expectations is important in selecting the equilibrium in the static framework. However, in the dynamic model with staggered price-setting, the role of history becomes another key determinant of the equilibrium currency pricing. The role of history may dominate the role of expectations when the firms are myopic, particularly in the competitive local market. It also becomes dominant in the staggered price setting when a small fraction of the new price setters are backward-looking. The result suggests the importance of history in explaining why the firm tends to choose the US dollar as vehicle currency.

"Is My Crown Better than Your Euro? Exchange Rates and Public Opinion on the European Single Currency"

The No to the euro in referendums in Denmark and Sweden has been characterized as a public rebellion against an elite project and a sign of a general Euroscepticism among the citizens. However, it is often ignored that support for the euro fluctuates significantly over time in these countries, and hence analysing referendum outcomes simply in terms on static factors will provide only part of the explanation. In contrast to existing studies, this paper provides an analysis of the short-term dynamics in public support for the euro in the period leading up to the referendums. We thus address the question of why public attitudes towards monetary integration vary over time. We argue that at least part of the answer can be found in exchange rate fluctuations. Existing studies have neglected the fact that the national currency is not only a purely monetary indicator, but also carries symbolic weight. The public is therefore less likely to surrender their national currency when it is strong than when it is weak. They are also less willing to accept a replacement currency (e.g. the euro) when it is seen as weak vis-à-vis other world currencies. Our analysis of the two euro campaigns lends credence to our proposition that exchange rates matter. Moreover, we test impact of exchange rate changes on support of the euro using time series analysis. We find that the rapid fall in the value of the euro vis-à-vis the dollar contributed to the Danish rejection of the euro, whereas the strength of the Swedish currency made the Swedes more reluctant to relinquish their crown