Affine Term Structure Constraints on Euribor data

This article discusses some modifications to non arbitrage models described by an Ornstein- Uhlenbeck latent process and an affine dynamic system. The empirical analysis refers to Euribor rates, due to the leading role they have in financial markets, but also to help the replicability of the results due to their accessibility and gratuitous nature. The benchmark model belongs to the class of Affine Term Structure Models (ATSM), whom owe their popularity to the success of Duffie and Kan (1996). Nodes have been calculated recursively through the use of the Kalman filter, and hence have the corresponding bayesian interpretation. The proposals differ from traditional models on some constraints posed on certain model specifications that allow to identify different aspects of the term structure. Through a clear identification of the type of contribution that each factor can undertake, it is possible to define probabilistic structures with minimal residuals purified from the dominant systematic residues visible in classic model residuals. Term Structure properties seem to be be identified with greater precision, which in the authors opinion justifies the relaxation of the hypothesis due to the additional constraints. The empirical analysis tries to convey such findings, and reminds of possible evolving paths of this line of work, such as a different specification of the transition process or the relaxation of linear and gaussian nature.

THE EU AGRICULTURAL POLICY: A CONSUMER VIEWPOINT

The final objective of government intervention is the attainment of the 'common good' for society as a whole. Government are supposed to intervene in market economies mainly in order to offset market failures. However governments themselves often fail to maximise the common good, especially when private interests prevail. In the decision-making process of the CAP agricultural lobbies play a predominant role, without any substantial counterpart lobbying to defend the interest of society as a whole. Although, according to common sense, food surpluses and related budgetary costs (export subsidies, food storage, etc.) would disappear if public price support were dismantled, this elementary solution to the most important problems raised by the CAP was never fully accepted. The cost of the CAP, mainly due to the agricultural price and farm revenue support, amounts to almost 50% of the EU budget, paid by taxpayers. Moreover, according to OECD estimates, an almost similar invisible transfer of income to agricultural producers is borne by consumers paying higher market prices. Consequently, although agriculture accounts only for 1.7% of the Community GDP, the cost of the CAP as big as the total EU budget. The performance of sectoral economic policies is usually appraised on the grounds of three sub-objectives better specifying the broad dimensions of social well-being: economic efficiency, social equity and environmental sustainability. The effects on economic efficiency are manifestly negative. Domestic market prices are distorted among farm products, capital and labour resources are retained in agriculture while their productivity for society as a whole would be much larger in other industries. If at least the CAP were consistent with structural adjustment in the long term then, sooner or later, the problem would be solved and the present waste of economic resources terminated. Unfortunately this is not the case as present distortions in market prices generate distorted investments. In terms of social equity, higher food prices act as a regressive tax on food burdening proportionally more worse-off households who spend a much larger share of their family budget on food than better-off households. On the other hand better-off farmers producing larger amounts of commodities whose price is supported get a much larger share of the benefits. As a result income disparities among citizens are increased. In terms of environmental sustainability the impact of farm price support is mixed. On the one hand higher farm prices stimulate the use of polluting inputs such as fertilisers and pesticides. On the other hand price support is likely to prevent serious problems in terms of depopulation or reduced environmental standards in some marginal regions. However these positive effects are circumscribed to specific areas and could be attained in a much more effective way by specific agri-environmental and agri-regional policy measures. According to the recent document of the Commission Agenda 2000, the very nature of the CAP will not be substantially changed before 20006. The worse aspects of the CAP in EU-15 will be reduced to a certain extent, but this positive impact on European social well-being is likely to be largely offset by the negative impact on new Member Countries which will have to accept the acquis communautaire in agricultural policy. In the Amsterdam Treaty a strong 'horizontal clause' is instituted by which Community Consumer Policy should also monitor the other EU policies both at Community and national level in order to protect consumer interests. Up to now the noxious effects of the agricultural price support policy could be cast to farm lobbies and to ill-informed policy makers, however in the future the Consumer Policy will be co-responsible for the reduction of social welfare generated by the CAP as well as by other sectoral policies.Agricultural and Food Policy,

Monthly Movements in the Australian Dollar and Real Short-term Interest Differentials: An Application of the Kalman Filter

This paper applies a rational expectations model of the real exchange rate to Australian data. Specifically, it decomposes monthly movements in Australia’s real exchange rate into a transitory and a permanent component. The transitory component is identified with changes in the unobservable ex ante short-term real interest differential. The permanent component is denoted as changes in the unobservable long-run equilibrium real exchange rate. A state space model provides the framework for the treatment of these unobservable components and the traditional assumptions of the expectations hypothesis of the term structure of interest rates and no cross-currency risk premium are relaxed. The ex ante real interest differential is found to explain very little of the month-to-month movement in the real exchange rate. However, given that the Australian data fails to unambiguously support the existence of a risk premium in the foreign exchange market, the model collapses to an uncovered interest parity relation which finds little empirical support in the literature. These results imply that the model’s assumption of rational expectations and hence, an efficient market in foreign exchange, may be inappropriate for describing the monthly variation in Australia’s real exchange rate.

Policy Framing and Party Competition: The Italian Political Debate on Local Public Services since the Economic Crisis

In recent years many European governments reacted to the economic crisis introducing austerity measures that particularly affected Local Public Services (LPSs) through outsourcing, privatization and marketization. While several studies have analysed the logics of instruments choice also in this policy sector, the political discourses and policy frames that accompanied the tools selection for the management of LPSs in the last years have been paid limited attention in the scholarly literature. Starting from these premises, the article analyses the debate on LPSs that has developed in Italy since 2008, reconstructing the frames used by the main parties through the analysis of both electoral manifestos and press reviews of articles relevant to LPSs in three newspapers. Particular attention is paid to the 2011 referendum against the privatization of LPSs and the 2018 referendum on local public transportation management in Rome. The paper concludes that the economic crisis and subsequent transformations of party politics and participation encouraged a politicization of the issues around local public services, as well as a shift in the related policy discourse. The parties' choices and policy frames were guided mainly by a strategic logic defined in relation to the salience of the LPS issue and the competitive context

As employees and consumers speak out, how can corporations meet expectations?

External review, however crude, can improve the status quo. And today, it is no longer the sole remit of a handful of for-profit, activist investors. Free data and mobilised informal networks have enabled previously fragmented voices to amplify. Armed with a social media account and an opinion, the reach of any one person is limited only by their conviction, stamina, and, ideally, the quality of their insights

Times of Crisis : Success or Decline of the Left

The crisis that especially since the 2008 has shown the deep weakness of the capitalistic economic model induces to reflect on the role of the radical left parties and on their capacity to propose alternative policies, interpreting the citizens’ demands. Starting from these premises this article analyses three parties of the radical left party family- United Left, Left Freedom and Ecology and Syriza- that act respectively in Spain, Italy and Greece, three of the European democracies most affected by the social consequences of the crisis. The article proposes a diachronic comparison of the three parties’ policy pro-posals, organizational model and strategies in order to explain their greater or lesser ability to attract con-sensus in the last years

The Sanctuary of Athena Alea at Tegea: Recent Excavations in the Northern Area. Results and Problems

Papers from the third international seminar on Ancient Arcadia, held at the Norwegian Institute at Athens, 7-10 May 2002The excavations in the northern area of the sanctuary of Athena Alea at Tegea, organized by the Norwegian Institute at Athens during the period 1990-94, investigated the area directly in front of the 'ramp' emerging from the northern flank of the classical temple and identified a long stratigraphical sequence, from the modern occupation back to the early archaic period. This area was probably always used as an open courtyard, with few and small structures with the only exception of a big mud-brick wall in east-west direction, probably the northern limit of the sanctuary area in the 6th century B.C. The evidence recovered gives indications about the presence of early archaic and Geometric layers, which should be investigated by future excavations