The Importance of Industrial Policy in Quality-Ladder Growth Models

We extend the class of quality-ladder growth models (Grossman- Helpman (1991), Segerstrom (1998) and others), to encompass an economy with asymmetric fundamentals. In contrast to the standard framework, in our model industries may di¤er in terms of their innovative potential (quality jumps and arrival rates) and consumers�preferences. This extension allows us to bring industrial policy back into the realm of the growth policy debate. We �rst show that it is always possible to raise the long-run growth rate and the social welfare of the economy through a costless tax/subsidy scheme reallocating resources towards the relatively more promising industries. We then prove that, in certain economies, even a mere pro�t taxation policy increases economic growth and social welfare above the laissez-faire.Innovation-Driven Growth, Asymmetric Fundamentals, Industrial Policy

On Robust Asymmetric Equilibria in Asymmetric R&D-Driven Growth Economies

In an R&D-driven growth model with asymmetric fundamentals the steady state equilibrium R&D investments are industry-specific and they are such that R&D returns are equalized across industries. Return equalization, however, makes investors indifferent as to where to target research and, hence, the problem of allocation of R&D investments across industries is indeterminate. Agents' indifference creates an ambiguous investment scenario. We assume that agents hold "ambiguous" beliefs on the per-industry profitability of their R&D investments. Investors' aversion towards ambiguity (in the sense of Gilboa-Schmeidler, 1989) eliminates the indeterminacy of the R&D investment problem. In particular, we prove that the asymmetric return-equalizing equilibrium is robust against a however small degree of investors' aversion to ambiguity.R&D driven growth models, symmetry/asymmetry, ambiguity

Flower development and pollen vitality of moringa oleifera lam. Grown in a humid temperate climatic condition

Moringa oleifera is a tropical tree cultivated in many countries. This species has acquired a great importance in human nutrition and it was recently indicated as a “novel food” by the European Commission. Recently, moringa plants have been introduced in humid temperate climatic areas, among which Moreno (Buenos Aires Province-Argentina). In such area, the cultivation is possible for the production of leaves, but plants need protection during winter time in order to overcome damages due to low temperatures and hence to produce capsules and seeds. The main objective of this research was to study flower morphology and anatomy of M. oleifera, as well as microsporogenesis and viability of pollen grains of plants cultivated in Moreno in comparison with those produced in a humid sub-tropical climatic area of Argentina (San Miguel de Tucumán). Flowers grown in the temperate environment resulted similar for morphological parameters to those observed in the sub-tropical environment. Nevertheless, pollen grain fertility depended directly on air temperature and it was negatively affected by the lower temperatures registered in the temperate site. According to the observed results, pollen viability increases with mean monthly temperatures above 16°C.Fil: Radice, Silvia. Universidad de Moron. Facultad de Agronomia y Ciencias Agroalimentarias. Laboratorio de Investigaciones En Fisiología Vegetal; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Giordani, Edgardo. Università degli Studi di Firenze; Itali

Prejudice and Immigration

We study immigration policy in a small open receiving economy under self-selection of migrants. We show that the immigration policy choice aspects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives' expectations on the size and skill composition of the incoming migrant population (and, hence, on the welfare effects of immigration). In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus con�rm initial beliefs. This self-ful�lling mechanism sustains the endogenous formation of an anti or pro-immigration "prejudice".We study immigration policy in a small open receiving economy under self-selection of migrants. We show that the immigration policy choice aspects and is affected by the migratory decisions of skilled and unskilled foreign workers. From this interaction multiple equilibria may arise, which are driven by the natives' expectations on the size and skill composition of the incoming migrant population (and, hence, on the welfare effects of immigration). In particular, pessimistic (optimistic) beliefs induce a country to impose higher (lower) barriers to immigration, which crowd out (crowd in) skilled migrants and thus con�rm initial beliefs. This self-ful�lling mechanism sustains the endogenous formation of an anti or pro-immigration "prejudice".Non-Refereed Working Papers / of national relevance onl

The Immigration Policy Puzzle

This paper revisits the puzzle of immigration policy: standard economic theory predicts that free immigration improves natives' welfare, but (with few historical exceptions) an open door policy is never implemented in practice. What rationalizes the puzzle? We �rst review the model of immigration policy where the policy maker maximizes national income of natives net of the tax burden of immigration (Borjas, 1995). We show that this model fails to provide realistic policy outcomes when the receiving region's technology is described by a standard Cobb-Douglas or CES function, as the optimal policy imposes a complete ban on immigration or implies an unrealistically large number of immigrants relative to natives. Then the paper describes three extensions of this basic model that reconcile theory with evidence. The �rst introduces a cost of integration of the immigrant community in the destination country; the second takes into account the policy maker's redistributive concern across different social groups; the last extension considers positive spillover effects of (skilled) migrants on the receiving economy.This paper revisits the puzzle of immigration policy: standard economic theory predicts that free immigration improves natives' welfare, but (with few historical exceptions) an open door policy is never implemented in practice. What rationalizes the puzzle? We �rst review the model of immigration policy where the policy maker maximizes national income of natives net of the tax burden of immigration (Borjas, 1995). We show that this model fails to provide realistic policy outcomes when the receiving region's technology is described by a standard Cobb-Douglas or CES function, as the optimal policy imposes a complete ban on immigration or implies an unrealistically large number of immigrants relative to natives. Then the paper describes three extensions of this basic model that reconcile theory with evidence. The �rst introduces a cost of integration of the immigrant community in the destination country; the second takes into account the policy maker's redistributive concern across different social groups; the last extension considers positive spillover effects of (skilled) migrants on the receiving economy.Non-Refereed Working Papers / of national relevance onl

Uncertainty Averse Bank Runners

Bank runs are relatively rare events characterized by highly pessimistic depositor’s expectations. How would pessimistic depositors expect to be treated in a bank run? How will this affect their behaviour? How can Banks handle this kind of risk? In the framework of a Diamond-Dybvig- Peck-Shell banking model, in which a broad class of feasible contractual arrangements (including .suspension schemes.) is allowed and which admits a run equilibrium, we analyze a scenario in which depositors are uncertain of their treatment should a run occur. We check whether bank runs are more likely or less likely to happen, in particular, if depositors are maxmin decision makers. We assess the utility of suspension schemes in the presence of pessimistic bank runners.Bank runs are relatively rare events characterized by highly pessimistic depositor’s expectations. How would pessimistic depositors expect to be treated in a bank run? How will this affect their behaviour? How can Banks handle this kind of risk? In the framework of a Diamond-Dybvig- Peck-Shell banking model, in which a broad class of feasible contractual arrangements (including .suspension schemes.) is allowed and which admits a run equilibrium, we analyze a scenario in which depositors are uncertain of their treatment should a run occur. We check whether bank runs are more likely or less likely to happen, in particular, if depositors are maxmin decision makers. We assess the utility of suspension schemes in the presence of pessimistic bank runners.Non-Refereed Working Papers / of national relevance onl

The Importance of Industrial Policy in Quality-Ladder Growth Models

We extend the class of quality-ladder growth models (Grossman and Helpman, 1991, Segerstrom, 1998 and others), to encompass an economy with asymmetric fundamentals. In contrast to the standard framework, in our model industries may differ in terms of their innovative potential (quality jumps and arrival rates) and consumers' preferences. This extension allows us to bring industrial policy back into the realm of the growth policy debate. We first show that it is always possible to raise the long-run growth rate and the social welfare of the economy through a costless tax/subsidy scheme reallocating resources towards the relatively more promising industries. We then prove that, in certain economies, even a mere profit taxation policy increases economic growth and social welfare above the laissez-faire.We extend the class of quality-ladder growth models (Grossman and Helpman, 1991, Segerstrom, 1998 and others), to encompass an economy with asymmetric fundamentals. In contrast to the standard framework, in our model industries may differ in terms of their innovative potential (quality jumps and arrival rates) and consumers' preferences. This extension allows us to bring industrial policy back into the realm of the growth policy debate. We first show that it is always possible to raise the long-run growth rate and the social welfare of the economy through a costless tax/subsidy scheme reallocating resources towards the relatively more promising industries. We then prove that, in certain economies, even a mere profit taxation policy increases economic growth and social welfare above the laissez-faire.Articles published in or submitted to a Journal with I

Entrepreneurs meet financiers: Evidence from the business angel market

This paper formalizes and estimates the process of search and matching between entrepreneurs and financiers in the business angel (BA) market. Our theoretical model describes the market for entrepreneurial finance as a fair in which the two sides of the market can meet bilaterally and transform a rough entrepreneurial idea into a real start-up firm. We then collect a new dataset from the BA markets of 17 developed countries for the period 1996-2014, and we estimate the aggregate matching function expressing the number of deals as a function of the number of submitted entrepreneurial projects and of business angels. Empirical findings confirm the technological features assumed in the theoretical literature: positive and decreasing marginal returns to both inputs (stepping on toes effect), technological complementarity across the two inputs (thick market effect) and constant returns to scale. We discuss the theoretical and policy implications of these findings

The Digital Revolution and COVID-19

We develop a simple model of digital markets to analyze the impact of Covid- 19 on the digital transformation of sectors. The lockdown due to Covid-19 is modeled as a shock that wipes out the physical market, temporarily leaving digital consumption as the only option. Under plausible assumptions on digital demand and supply, the model predicts that such temporary shock produces an irreversible rise of the digital markets. This happens for three distinct reasons. First, by temporarily eliminating the physical market, Covid-19 provides a strong incentive for rms to carry out the xed investments necessary to venture into the digital market (supply channel). Secondly, by forcing even the most reluctant consumers into the digital market, Covid-19 pushes them to familiarize with digital platforms, and this condence endures in the post-Covid era (demand channel). Finally, if consumerstaste for digitalization is a¤ected by the size of the digital market, a market may be entrapped into a low-digital equilibrium indenitely. In such context, the lockdown due to the pandemic is the shock that may unleash the forces of digitalization and tilt the entire sector towards a high-digital equilibrium (network externalities channel