Turning-point indicators from business surveys: real-time detection for the euro area and its major member countries

We present tools for real-time detection of turning points in the industrial production growth-cycle of the euro area and its four largest economies. In particular, we apply a multivariate hidden Markov model to national survey results – i.e. to the earliest information about current economic developments - in order to estimate the probability of expansionary and recessionary phases. The balances of opinions used as inputs of the model are selected by ranking them according to their degree of commonality with respect to the cyclical fluctuations of the industrial sector, as estimated with the Generalized Dynamic Factor Model. The indicators appear reliable and stable.business cycle, hidden Markov model, business surveys

Italian National Accounts, 1861-2011

A great deal of new quantitative research has been produced over the last three decades which has radically changed the received interpretation of Italian economic development. Against this backdrop, the Bank of Italy, Istat and the University of Rome "Tor Vergata", together with academics from other institutions, developed a project to estimate new historical national accounts time series. Our reconstruction covers the 150 years following the political unification of Italy and is based on the most up-to-date results in the literature. It provides estimates of supply and uses at constant and at current prices. The documentation could not be reported fully in the following few pages. The details will be presented in full in a book to be published in the coming months, coauthored by all who contributed to the enterprise. In this paper I draw a general picture of the new time series. I focus on historically significant periods, using them as case studies in order to illustrate some features of the new data, both technical and substantial. A detailed, if incomplete, methodological account of our work is given in the appendices.Italy, National Accounts, Historical data reconstruction

Industrial District and Local Banks: Do the Twins Ever Meet?

The paper offers theoretical and empirical insights into the links between banks and firms in industrial districts and to the way investment is financed. Theoretically, it is assumed that district-banking localism is embedded in the industrial districtsÂ’ social context. District banks should thus be distinguished by such features as greater concentration of lending, greater concentration of market shares and the cooperative legal form. Counteracting forces (e.g. excessive risk taking, higher monitoring costs and the cooperativeÂ’s typical dilution of power among members) may nonetheless prevent district-banking localism from arising. The empirical analysis crosses an Istat dataset on local labour systems and industrial districts with banking supervisory data as of the end of 1991. Cooperative banks are found to concentrate their lending and to acquire larger market shares in industrial districts, though the evidence is not clear-cut. Mutual banks, on the other hand, generally concentrate their lending to small local labour systems, thereby indicating that their role as local banks is played not only in industrial districts but in non-district areas as well. Finally, in a regression analysis we find that investment by firms operating in industrial districts is more closely correlated with their cash-flow than those of non-district firms, although the pattern varies across regions and economic sectors. The conclusion is that the rise of district banking localism cannot be taken for granted and that IDs do not seem to be homogeneous entities even as far as bank-firm relationships are concerned.banks, enterprises, business financing

Paolo Baffi: la moneta europea e “il crepuscolo degli esperti”

Il lavoro affronta una questione centrale nella storia del pensiero economico: quella del rapporto fra teoria economica e scelte politiche. Lo fa studiando il pensiero economico di Paolo Baffi (1911-1989), Governatore della Banca d’Italia dal 1975 al 1979, còlto in un momento particolare della storia europea e italiana: quello che precede immediatamente l’avvio del Sistema monetario europeo (SME), nel 1978, e gli anni successivi. Sono i primi passi dell’integrazione monetaria europea. Il ruolo di Baffi nel negoziato sullo SME è centrale, ma ne esce sconfitto. Allora come ora, gli esperti erano criticati in nome della democrazia. Lo fu anche l’esperto Paolo Baffi, per le perplessità pubblicamente espresse sulla costruzione di un sistema monetario a guida tedesca che avrebbe comportato l’adesione a una politica monetaria di alti tassi di interesse. Una riflessione sul pensiero e sull’azione istituzionale di Baffi può essere utile nella ricerca di una sintesi fra tecnica e politica, oggi quanto mai urgente

Luigi Einaudi: teoria economica e legislazione sociale nel testo delle Lezioni (text in italian)

This essay focuses on the nexus between economic theory and social legislation, as dealt with by Luigi Einaudi in his Lezioni di politica sociale (1942). For this purpose, the conceptual and analytical model used in Einaudi's book is identified, which is based on three main premises 1) the liberal worldview; 2) the pragmatist epistemology, as derived from his friend Giovanni Vailati; 3) the Paretian economic theory which later on would give rise to the new welfare economics. In Einaudi's view, production and distribution belong to two different spheres. A market based economic system leads to an efficient equilibrium, once an initial distribution of resources is provided. If such a distribution does not satisfy some specified criteria of social justice, State intervention (i.e. social policy) can be justified. Social justice according to Einaudi means equality of opportunity. Liberty is not a metaphysical engine of history, and liberals cannot separate their political and moral objectives from the techniques by which they can be pursued. Social legislation is nothing else than the toolset by which the liberal idea can actually be realized. On this background, economic theory plays a central role as a useful abstraction which sheds light on the complex reality in which social policies are to be implemented.economic theory, equality of opportunity, fundamental theorems of welfare economics, language, liberal socialism, liberty, market, means and ends, monopoly, redistribution policies, social legislation

The changing relationship between inflation and the economic cycle in Italy: 1861\u20132012

The article investigates the relationship between GDP and prices in Italy in the long-run, from the country's Unification (1861) up to present day. By using the new national accounts data, over the period 1861\u20132012, we were able to make Italy the third country to have a historical test of the hybrid Phillips curve (in which both the new Keynesian and the backward-looking Phillips curves are tested), together with the UK and the US. How do economic growth and prices interact in Italy's different stages of economic growth? Unlike the US and the UK, where said interaction was already operating in mid-19th century, in Italy the link between inflation and the economic cycle emerged only after the First World War. We argue that this can be explained owing to Italy's different position in the international economic system and the way foreign conditioning factors (the exchange-rate regime and innovation in transportation) influenced the Italian industrialization. Before the First World War, deflation was imported. This turned out to be compatible with some GDP growth, insofar as the deflationist macroeconomic setting favoured capital inflows and technological upgrading. Whereas, from the First World War until the creation of a common European currency, price variations were mainly a consequence of national policies and domestic conditions: the trade-off with the GDP cycle is now manifest, both in the periods of deflation (the interwar years) and in those of inflation (the second half of the twentieth century). Our findings may also have important implications for present day, since price movements are once again, as in the liberal age, largely imported

Study of shock waves generation, hot electron production and role of parametric instabilities in an intensity regime relevant for the shock ignition

We present experimental results at intensities relevant to Shock Ignition obtained at the sub-ns Prague Asterix Laser System in 2012 . We studied shock waves produced by laser-matter interaction in presence of a pre-plasma. We used a first beam at 1ω (1315 nm) at 7 × 10 13 W/cm 2 to create a pre-plasma on the front side of the target and a second at 3ω (438 nm) at ∼ 10 16 W/cm 2 to create the shock wave. Multilayer targets composed of 25 (or 40 μm) of plastic (doped with Cl), 5 μm of Cu (for Kα diagnostics) and 20 μm of Al for shock measurement were used. We used X-ray spectroscopy of Cl to evaluate the plasma temperature, Kα imaging and spectroscopy to evaluate spatial and spectral properties of the fast electrons and a streak camera for shock breakout measurements. Parametric instabilities (Stimulated Raman Scattering, Stimulated Brillouin Scattering and Two Plasmon Decay) were studied by collecting the back scattered light and analysing its spectrum. Back scattered energy was measured with calorimeters. To evaluate the maximum pressure reached in our experiment we performed hydro simulations with CHIC and DUED codes. The maximum shock pressure generated in our experiment at the front side of the target during laser-interaction is 90 Mbar. The conversion efficiency into hot electrons was estimated to be of the order of ∼ 0.1% and their mean energy in the order ∼50 keV. Content from this work may be used under the terms of the Creative Commons Attribution 3.0 licence. Any further distributio

The changing relationship between inflation and cycle in Italy: 1861-2012

The article investigates the relationship between GDP and prices in Italy in the long-run, from the country's Unification (1861) up to present day. By using the new national accounts data, over the period 1861–2012, we were able to make Italy the third country to have a historical test of the hybrid Phillips curve (in which both the new Keynesian and the backward-looking Phillips curves are tested), together with the UK and the US. How do economic growth and prices interact in Italy's different stages of economic growth? Unlike the US and the UK, where said interaction was already operating in mid-19th century, in Italy the link between inflation and the economic cycle emerged only after the First World War. We argue that this can be explained owing to Italy's different position in the international economic system and the way foreign conditioning factors (the exchange-rate regime and innovation in transportation) influenced the Italian industrialization. Before the First World War, deflation was imported. This turned out to be compatible with some GDP growth, insofar as the deflationist macroeconomic setting favoured capital inflows and technological upgrading. Whereas, from the First World War until the creation of a common European currency, price variations were mainly a consequence of national policies and domestic conditions: the trade-off with the GDP cycle is now manifest, both in the periods of deflation (the interwar years) and in those of inflation (the second half of the twentieth century). Our findings may also have important implications for present day, since price movements are once again, as in the liberal age, largely imported