Financial fragility across Europe and the US: The role of portfolio choices, household features and economic-institutional setup

This paper investigates households’ financial fragility in twelve European countries and in the US by employing the first wave of the Household Finance and Consumption Survey (HFCS) and the 2010 Survey of Consumer Finances (SCF), respectively. Financial fragility is defined by taking into account both income constraints and portfolio composition (liquidity and indebtedness). Three main results emerge. First, the estimation of bivariate probit models reveals that in all countries holding an illiquid portfolio increases the likelihood of being financially fragile, while having a mortgage generally reduces it. Second, there are relevant differences among countries in their estimated average probability of financial fragility. Finally, decomposition of these differences by means of counterfactual methods provides evidence of a significant role of the country’s economic-institutional setup in providing a safety net against financial fragility. This is more true in Europe than in the US

Energy price increases and mitigation policies: Redistributive effects on Italian households

Since the second half of 2021, there has been a sharp increase in the prices of energy goods (electricity, heating gas, fuels) as well as of food, leading to inflation rates never experienced in Italy in the last forty years. Such high inflation rates prompted the Italian government to take measures to curb the prices of energy products, to increase social bonuses on electricity and gas bills, and to provide one-off allowances to households. The crucial question is what impact the price increases have had on households and whether the measures taken have protected the household sector from these increases. Therefore, we perform a microsimulation exercise on the period July 2021-March 2023 to quantify the effects of the price increases and of the measures on household expenditure and income. Our results indicate that the regressive impact of price increases was mitigated by the price containment measures due to their progressive nature and that the contribution of one-off allowances and social bonuses was very relevant. In 2022, the year in which households benefitted from the measures for twelve months, the fiscal policy interventions also succeeded in reducing inequality, the at-risk-of-poverty rate and energy poverty

Short-term household income mobility before and after the Great Recession: A four-country study

This paper analyses short-term intra-generational income mobility in France, Italy, Spain and the UK by exploiting the longitudinal component of EU-SILC for the periods 2005-2008 and 2012-2015. We investigate whether and to what extent the ability of households to move along the income distribution changed after the 2008 crisis and whether heterogeneities among countries exist. For this purpose, we employ mobility indexes and transition matrices as well as estimation of a 2SLS regression and of a dynamic ordered probit with random effects. Overall, indexes and transition matrices point to a decrease of mobility in the aftermath of the crisis. The econometric analyses suggest both the existence of a convergence process of incomes and state dependence of current and lagged income in both periods. We also observe sluggish income convergence and lower upward mobility in the second period. Among the microeconomic drivers, education and employment status are positive determinants of mobility. Finally, our results confirm crosscountry heterogeneity

17,β-estradiol inhibits hepatitis C virus mainly by interference with the release phase of its life cycle

Rationale & Aim: Estrogen and estrogen-mediated signalling protect from hepatitis C virus through incompletely understood mechanisms. We aimed to ascertain which phase(s) of HCV life cycle is/are affected by estrogens. Methods: Huh7 cells infected with the JFH1 virus (genotype 2a) were exposed to dehydroepiandrosterone, testosterone, progesterone and 17β-estradiol (tested with/without its receptor antagonist fulvestrant). Dose-response curves were established to calculate IC50 values. To dissect how 17β-estradiol interferes with phases of HCV life cycle, its effects were measured on the HCV pseudo-particle system (viral entry), the sub-genomic replicon N17/JFH1 and the replicon cell line Huh7-J17 (viral replication). Finally, in a dual-step infection model, infectious supernatants, collected from infected cells exposed to hormones, were used to infect naïve cells. Results: Progesterone and testosterone showed no inhibitory effect on HCV; dehydroepiandrosterone was only mildly inhibitory. In contrast, 17β-estradiol inhibited infection by 64-67% (IC50 values 140 to 160 nM). Fulvestrant reverted the inhibition by 17β-estradiol in a dose-dependent manner. 17β-estradiol exerted only a slight inhibition (<20%) on HCV pseudo-particles, and had no effect on cells either transiently or stably (Huh7-J17 cells) expressing the N17/JFH1 replicon. In the dual-step infection model, a significant IC50 decline occurred between primary (134 nM) and secondary (100 nM) infections (p=0.02), with extracellular HCV RNA and infectivity being reduced to a higher degree in comparison to its intracellular counterpart. Conclusions: 17β-estradiol inhibits HCV acting through its intracellular receptors, mainly interfering with late phases (assembly/release) of the HCV life cycle

Ia financial fragility a matter of illiqudity? An appraisal for Italian households

In this paper we investigate household financial fragility and assess the role played by the composition of the household portfolio besides standard determinants of this condition (e.g. income, indebtedness, age, gender, financial literacy). We take the case of Italy, given the very peculiar portfolio composition (high level of housing and low level of indebtedness and portfolio diversification) and provide two main contributions. First, we propose a novel definition of financial fragility. Second, based on this new measure, we use data from the 1998-2010 Bank of Italy Survey on Household Income and Wealth to investigate the determinants of this condition. Our results confirm most usual markers of financial fragility and additionally highlight the role of homeownership, which is not related to the presence of mortgages but it is rather connected to specific socio-demographic features such as age and marital status

The impact of REI on Italian households’ income: A micro and macro evaluation

In 2017, Italy’s government introduced a minimum income scheme, the so-called Income inclusion programme (REI, Reddito di inclusione). REI is a selective, means-tested and conditional scheme that aims at supporting incomes of those more in need. Its structure was recently modified to reach a larger percentage of the poor. In this paper, we simulate the impact of REI on household incomes and evaluate its effects with respect to poverty alleviation and inequality reduction. The analysis is based on the 2015 wave of IT-SILC, the Italian module of European Union Statistics on Income and Living Conditions. Our results show that, under full take-up, REI will reach 45.8% of households in absolute poverty and 22.5% of those in relative poverty. However, it has a mild impact on the incidence of both types of poverty, while it is more successful in reducing their intensity. We also estimate that REI would contribute to raising GDP by 0.14 percentage points through an increase in private consumption

A machine learning approach to rank the determinants of banking crises over time and across countries

We use a machine learning approach, namely AdaBoost, to rank the determinants of banking crises over time and across countries. We cover a total of 100 countries, advanced and emerging, over the years from 1970 to 2017. The paper first shows that AdaBoost has a better predictive performance than the logit model, both in-sample and out-of-sample; then, it employs AdaBoost to classify the major macroeconomic factors leading to banking crises. The baseline analysis reveals that the US 10yr Treasury interest rate and world growth play a key role in anticipating a crisis, and that these two variables explain a growing share of the results over time, for both country groups. Other variables, which have been highlighted as important in the literature on crises - such as inflation, current account, public and external debt and credit - are relevant in the lead up to banking crises, but their role has been decreasing over time compared to the aforementioned variables. We present also extensions of the model, which confirm and add to the main results of the baseline model