How sticky are local expenditures in Italy? Assessing the relevance of the “flypaper effect” through municipal data

An extensive literature analyses the impact of upper-tier transfers on the spending behaviour of lower level governments. According to the median voter framework, a transfer from the centre should act as a lump sum grant to residents and thus be spent by jurisdictions in the same proportion as residents are willing to spend their own money on public goods and services. But the actual local expenditure response to central government transfers is stronger than predicted by the theory, giving rise to the “flypaper effect”. Using the database on municipal accounts, and various other information sources, this work aims at assessing the size of the effect for Italian municipalities and the symmetry in the local expenditure response to central government transfers. Our dataset enables us also to investigate the role of some political factors. We find a sizeable effect and a remarkable asymmetric response of municipal expenditures to central government transfers as well as a significant role for political variables.flypaper effect, intergovernmental transfers, fiscal federalism

Dynamic Models and Structural Shift: Monetary Transmission Mechanisms in Italy before and after EMS

The focus is on nominal transmission mechanisms in Italy with special reference to monetary effects and how they have changed with the increased economic integration in Europe and the increased independence of Italian Central Bank. The empirical model investigates the dynamic determination of money, income, prices, and interest rates based on the cointegrated VAR model. The choice of price measurements and its consequences for the empirical results are given special attention. The empirical results provide empirical results on the macroeconomic effects of joining the ERM and of capital deregulation.I(2) analysis; regime shift; price homogeneity; money demand; IS-LM; monetary policy

Dealing with unexpected shocks to the budget

In this paper we assess the impact of unexpected shocks to real interest rates and GDP on government budgets for nine European Union countries. Shocks are estimated as onestep-ahead forecast errors arising from a recursive bivariate VAR model. To assess the impact on the budgets we use available information on budgetary sensitivities with respect to the business cycle and estimate the sensitivities to changes in interest rates on the basis of the maturity structure of public debts. Our analysis is relevant, in particular, to define what safety margins are needed to avoid the deficit exceeding the 3 per cent Maastricht threshold. The approach followed in this paper differs in two respects from standard analyses aiming at defining budgetary positions that satisfy the Stability and Growth Pact. First, whereas the latter examine only fluctuations in economic activity, we also consider fluctuations in interest rates. Second, whereas standard analyses focus on deviations from trends and define margins for the medium-term cyclically adjusted balance, we examine unexpected shocks and define margins for nominal balances. The results point to significant differences in the required margins across countries, depending on the amplitude of past shocks, the magnitude of automatic stabilizers and the size and maturity structure of the debt. In the case of Italy, the country with the highest debt/GDP ratio and the largest fraction of short-term debt, the impact of unexpected shocks to interest rates may be quite substantial. However, when shocks to interest rates and GDP are considered jointly, other countries (Belgium and Finland) seem to require larger margins.budgeting, Stability and Growth Pact, forecast errors

Water services in Italy: implementation of the reform and efficiency of providers

The paper investigates the organization of the Italian water sector in the light of the reforms of public utilities. The aim is to examine the degree of implementation of the water sector reform (the so-called Galli Law of 1994) and assess the performance of operators through a study of their financial indicators and a non-parametric efficiency analysis. The information sources include two Bank of Italy surveys carried out in 2007 on local public water authorities and local water service providers. Financial indicators point to a low return on equity: for more than half of the firms it is lower than the risk-free interest rate. The non-parametric efficiency analysis does not reveal significant economies of scope and highlights a certain degree of variability of technical efficiency scores. This suggests that there is room for efficiency gains through the introduction of comparative competitive mechanisms such as the yardstick competition.water supply, data envelopment analysis, public utilities, natural monopoly, regulation

CHRONOLOGY OF THE MESSINIAN EVENTS IN THE NORTHERNMOST PART OF THE MEDITERRANEAN: THE GOVONE SECTION (PIEDMONT BASIN, NW ITALY)

In marginal Mediterranean sub-basins the first phase of the Messinian salinity crisis (MSC) is recorded by primary sulfate evaporites (Primary Lower Gypsum unit); in deeper settings, the gypsum makes lateral transition into shales and marls usually barren of calcareous fossils that can hamper the identification of the MSC onset. The Govone section (Piedmont Basin, NW Italy) represents an opportunity to examine in detail the pre-MSC interval and the transition to the first stage of the MSC in a relatively deep marginal basin in the northernmost sector of the Mediterranean. We provide herein an age model for the Govone section, based on an integrated stratigraphic study, including cycloctratigraphy, magnetostratigraphy and micropaleontology (foraminifera and calcareous nannofossils) of the pre-MSC interval and the transition to the MSC. Chron C3An.1n has not been recognized in the study succession, most likely due to early diagenetic processes. Thus, the last occurrence of Turborotalita multiloba occurring two lithological cycles above the second influx of G. scitula, is the event that best approximate the MSC onset and is consistently recorded across the Piedmont Basin, with higher abundance respect to coeval Mediterranean successions. The calibration of the lithological cyclicity by means of these two bioevents allowed to recognize that, unlike other Mediterranean sections, the disappearance of calcareous microfossils occurs before the MSC onset, probably, in response of diagenetic processes favouring the dissolution of calcareous shells

CHRONOLOGY OF THE MESSINIAN EVENTS IN THE NORTHERNMOST PART OF THE MEDITERRANEAN: THE GOVONE SECTION (PIEDMONT BASIN, NW ITALY)

In marginal Mediterranean sub-basins the first phase of the Messinian salinity crisis (MSC) is recorded by primary sulfate evaporites (Primary Lower Gypsum unit); in deeper settings, the gypsum makes lateral transition into shales and marls usually barren of calcareous fossils that can hamper the identification of the MSC onset. The Govone section (Piedmont Basin, NW Italy) represents an opportunity to examine in detail the pre-MSC interval and the transition to the first stage of the MSC in a relatively deep marginal basin in the northernmost sector of the Mediterranean. We provide herein an age model for the Govone section, based on an integrated stratigraphic study, including cycloctratigraphy, magnetostratigraphy and micropaleontology (foraminifera and calcareous nannofossils) of the pre-MSC interval and the transition to the MSC. Chron C3An.1n has not been recognized in the study succession, most likely due to early diagenetic processes. Thus, the last occurrence of Turborotalita multiloba occurring two lithological cycles above the second influx of G. scitula, is the event that best approximate the MSC onset and is consistently recorded across the Piedmont Basin, with higher abundance respect to coeval Mediterranean successions. The calibration of the lithological cyclicity by means of these two bioevents allowed to recognize that, unlike other Mediterranean sections, the disappearance of calcareous microfossils occurs before the MSC onset, probably, in response of diagenetic processes favouring the dissolution of calcareous shells

Beyond Glycemic Control in Diabetes Mellitus: Effects of Incretin-Based Therapies on Bone Metabolism

Diabetes mellitus (DM) and osteoporosis (OP) are common disorders with a significant health burden, and an increase in fracture risk has been described both in type 1 (T1DM) and in type 2 (T2DM) diabetes. The pathogenic mechanisms of impaired skeletal strength in diabetes remain to be clarified in details and they are only in part reflected by a variation in bone mineral density. In T2DM, the occurrence of low bone turnover together with a decreased osteoblast activity and compromised bone quality has been shown. Of note, some antidiabetic drugs (e.g., thiazolidinediones, insulin) may deeply affect bone metabolism. In addition, the recently introduced class of incretin-based drugs (i.e., GLP-1 receptor agonists and DPP-4 inhibitors) is expected to exert potentially beneficial effects on bone health, possibly due to a bone anabolic activity of GLP-1, that can be either direct or indirect through the involvement of thyroid C cells. Here we will review the established as well as the putative effects of incretin hormones and of incretin-based drugs on bone metabolism, both in preclinical models and in man, taking into account that such therapeutic strategy may be effective not only to achieve a good glycemic control, but also to improve bone health in diabetic patients