What is this thing called confidence? A comparative analysis of consumer confidence indices in eight major countries

The paper examines the evolution of consumer confidence indices in Australia, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America since the 1970s, by modelling them in a multivariate framework of common macroeconomic variables for each country. Results suggest that: (a) the main economic determinants of consumer confidence cannot be summarized only on the basis of some macroeconomic variables; (b) consumer confidence indices have some ability to forecast economic activity, provided that both their coincident nature is taken into account and that a number of data-coherent parameter restrictions are imposed. A number of analyses (both insample and out-of-sample) are devoted to assessing the robustness of previous findings.consumer confidence determinants, GDP indicator, in-sample and out-of-sample forecasting ability

The Evolution of Confidence for European Consumers and Businesses in France, Germany and Italy

The paper examines the evolution of consumer and business confidence indexes in France, Germany and Italy since the mid-eighties, using regressions of the indexes on a set of common macroeconomic variables for each country. Comparison of the results across agents (i.e. consumers and entrepreneurs in the same country) and across countries highlights some differences in behaviour that have emerged in the last fifteen years. In particular, the paper inquires into the causes of the recent break in the relationship between the consumer and business confidence indexes.firms and consumers confidence index

An Investment-Function-Based Measure of Capacity Utilisation. Potential Output and Utilised Capacity in the Bank of Italy's Quarterly Model

Measures of potential output and the output gap are increasingly being developed and used to concisely quantify and monitor the risk of price accelerations stemming from rises in aggregate demand that are not met by a corresponding increase in supply. They often play a prominent role in the price determination mechanisms of macroeconometric models. In this paper we build a measure of potential private-sector value added for the Italian economy that is consistent with the capital accumulation process in the Banca d’Italia’s Quarterly Model — and more generally with the rest of the supply-side block of that model. More specifically, we exploit the fact that the investment function can be thought of as a relationship transforming desired gross additions to capacity output into capital accumulation by means of a conversion factor (the optimal capital/output ratio). Thus, if one removes the component of investment decisions that stems from changes in the relative price of the production factors (i.e., in the optimal capital/output ratio), then a measure of the desired gross addition to capacity may be constructed.The results draw a cyclical picture of the degree of capacity utilisation for the period 1970-1997 that is roughly in line with those produced by the Wharton and Hodrick-Prescott filter approaches, as well as with the pictures resulting from the ISAE, IMF, European Commission and OECD measures of the output gap. Our investment-function-based measure appears to be a promising indicator of the pressure exerted on prices by demand accelerations. Its empirical properties are, on the whole, acceptable and plausible.

Energy Consumption, Survey Data and the Prediction of Industrial Production in Italy

We investigate the prediction of Italian industrial production. We first specify a model based on electricity consumption; we show that the cubic trend in such a model mostly captures the evolution over time of the electricity coefficient, which can be well approximated by a smooth transition model à la Terasvirta, with no gains in predictive power, though. We also analyze the performance of models based on data of different business surveys. According to basic statistics of forecasting accuracy, the linear energy-based model is not outperformed by any other single model, neither by a combination of forecasts. However, a more comprehensive set of evaluation criteria sheds light on the advantages of using the whole information available. Overall, the best forecasting performance is achieved by estimating a combined model which includes among regressors both energy consumption and survey data.Italy, industrial production, energy

Why demand uncertainty curbs investment: Evidence froma a panel of Italian manufacturing firms

From a theoretical point of view, uncertainty over the demand for a firmÂ’s product may not have clear effects on investments, because of the influence of a number of factors, such as the production technology and the amount of competition in the product market.Until now, a deeper investigation of the interplay of different factors in the temporal dimension has not been possible because the empirical research has been based on cross-section analysis. This omission makes biased estimates of the investment-uncertainty relationship likely.The aim of this paper is to extend the findings of the empirical literature by using a panel of Italian firms over the period 1996-2004, covering a complete business cycle. The availability of a panel of survey data on companiesÂ’ investment plans, expected future sales and demand uncertainty allows us to account for unobservable individual firm differences, macroeconomic shocks and the temporal evolution of the investment-uncertainty relationship. A key finding of our paper concerns the role of the competition faced by Italian firms in 1996-2004. The gradual loss of market power experienced by Italian manufacturing firms along with the increasing flexibility of labour input may have weakened the negative effect of uncertainty on investment decisions. We show that, in repeated cross-section estimates, the omission of firm-specific effects together with the dynamic interplay described above, would have lead to misleading conclusions about the relevance of demand uncertainty in explaining investment decisions.planned investments, demand uncertainty, survey data, panel estimation.

Forecasting Industrial Production in the Euro Area

The creation of the Euro area has increased the importance of obtaining timely information about short-term changes in the area's real activity. In this paper we propose a number of alternative short-term forecasting models, ranging from simple ARIMA models to more complex cointegrated VAR and conditional models, to forecast the index of industrial production in the euro area. A conditional error-correction model in which the aggregate index of industrial production for the area is explained by the US industrial production index and the business confidence index from the European Commission harmonised survey on manufacturing firms achieves the best score in terms of forecasting capacity.

Family firms and investments

Family firms are a widespread control structure in most countries, especially among smaller firms. A vast literature addresses the question of whether they are performing better or worse than comparable non family firms, with not entirely conclusive results. Here we take a different, indirect approach and test whether investment decisions in family firms are more sensitive to uncertainty than in other firms. By using a novel dataset that includess both a better definition of family firms than commonly used (through self evaluation) and a very good proxy of the uncertainty on future demand that firms face, we are able to verify that – as compared to other firms – family firms are significantly more sensitive to uncertainty: this might contribute to explain why in some situations they perform better, whereas in others they do worse. We find evidence that this greater sensitivity to uncertainty in family firms is basically due to the effects of risk aversion and capital irreversibility, where the latter appear to be associated to a greater opaqueness of family firms rather than to the degree of sunkness of fixed capital. Finally, we propose some evidence that the prevalence of family firms in Italy might be associated to long standing institutional factors, such as an inefficient law enforcement system and a low social capital.Family firms; investments; uncertainty; risk aversion; capital irreversibility

Family firms and investments

Family firms are a widespread control structure in most countries, especially among smaller firms. A vast literature addresses the question of whether they are performing better or worse than comparable non family firms, with not entirely conclusive results. Here we take a different, indirect approach and test whether investment decisions in family firms are more sensitive to uncertainty than in other firms. By using a novel dataset that includess both a better definition of family firms than commonly used (through self evaluation) and a very good proxy of the uncertainty on future demand that firms face, we are able to verify that – as compared to other firms – family firms are significantly more sensitive to uncertainty: this might contribute to explain why in some situations they perform better, whereas in others they do worse. We find evidence that this greater sensitivity to uncertainty in family firms is basically due to the effects of risk aversion and capital irreversibility, where the latter appear to be associated to a greater opaqueness of family firms rather than to the degree of sunkness of fixed capital. Finally, we propose some evidence that the prevalence of family firms in Italy might be associated to long standing institutional factors, such as an inefficient law enforcement system and a low social capital

Family firms and investments

Family firms are a widespread control structure in most countries, especially among smaller firms. A vast literature addresses the question of whether they are performing better or worse than comparable non family firms, with not entirely conclusive results. Here we take a different, indirect approach and test whether investment decisions in family firms are more sensitive to uncertainty than in other firms. By using a novel dataset that includess both a better definition of family firms than commonly used (through self evaluation) and a very good proxy of the uncertainty on future demand that firms face, we are able to verify that – as compared to other firms – family firms are significantly more sensitive to uncertainty: this might contribute to explain why in some situations they perform better, whereas in others they do worse. We find evidence that this greater sensitivity to uncertainty in family firms is basically due to the effects of risk aversion and capital irreversibility, where the latter appear to be associated to a greater opaqueness of family firms rather than to the degree of sunkness of fixed capital. Finally, we propose some evidence that the prevalence of family firms in Italy might be associated to long standing institutional factors, such as an inefficient law enforcement system and a low social capital

Metabolomic Profile of Young Adults Born Preterm

Prematurity is a risk factor for the development of chronic adult diseases. Metabolomics can correlate the biochemical changes to a determined phenotype, obtaining real information about the state of health of a subject at that precise moment. Significative differences in the metabolomic profile of preterm newborns compared to those born at term have been already identified at birth. An observational case–control study was performed at the University Hospital of Siena. The aim was to evaluate and compare the metabolomic profiles of young adults born preterm to those born at term. Urinary samples were collected from 67 young adults (18–23 years old) born preterm (mean gestational age of 30 weeks, n = 49), and at term of pregnancy (mean gestational age of 38 weeks, n = 18). The urinary spectra of young adults born preterm was different from those born at term and resembled what was previously described at birth. The Random Forest algorithm gave the best classification (accuracy 82%) and indicated the following metabolites as responsible for the classification: citrate, CH2 creatinine, fumarate and hippurate. Urine spectra are promising tools for the early identification of neonates at risk of disease in adulthood and may provide insight into the pathogenesis and effects of fetal programming and infants’ outcomes