High Yields: The Spread on German Interest Rates

This paper is a first attempt at evaluating the determinants of the total interest rate differentials on government bonds between high yielders, namely Italy, Spain, Sweden and Germany. In particular we address the question of the relative importance of local and global factors in the determination of such spreads. We identify and measure two components of total yield differentials: one due to expectations of exchange rate depreciation -- which we call the exchange rate factor -- another which reflects the market assessment of default risk. We propose and discuss a measure of the exchange rate factors and of the default risk premium based on interest rate swaps. Overall our investigation provides strong evidence in favor of the existence of a common trend for the Italian and Spanish spreads on Bunds, which is not shared by the Swedish spread. Such a trend is driven by international factors and is independent from country- specific shocks. Country-specific shocks are only relevant in explaining short term cycles around the common stochastic trend.

International Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure Reforms, 1977-1999

Why do some countries adopt market-oriented reforms such as deregulation, privatization and liberalization of competition in their infrastructure industries while others do not? Why did the pace of adoption accelerate in the 1990s? Building on neo-institutional theory in sociology, we argue that the domestic adoption of market-oriented reforms is strongly influenced by international pressures of coercion and emulation. We find robust support for these arguments with an event-history analysis of the determinants of reform in the telecommunications and electricity sectors of as many as 205 countries and territories between 1977 and 1999. Our results also suggest that the coercive effect of multilateral lending from the IMF, the World Bank or Regional Development Banks is increasing over time, a finding that is consistent with anecdotal evidence that multilateral organizations have broadened the scope of the “conditionality” terms specifying market-oriented reforms imposed on borrowing countries. We discuss the possibility that, by pressuring countries into policy reform, cross-national coercion and emulation may not produce ideal outcomes.http://deepblue.lib.umich.edu/bitstream/2027.42/40099/3/wp713.pd

Il ruolo della Corte di giustizia nella definizione della politica economica e monetaria europea

Il ruolo giocato dalla Corte di giustizia nel campo della politica economica e della politica monetaria è stato importante quanto sottostimato. Le due competenze dell’Unione sono profondamente differenti - ciascuna dotata di significative peculiarità - e tuttavia strettamente interconnesse. Definire i confini incerti tra politica economica e politica monetaria è stato il ruolo più importante svolto dalla Corte in questo campo. Questo ha comportato una precisazione dei ruoli delle istituzioni chiamate ad agire - Commissione, Consiglio, Banca centrale - così come dei limiti all’indipendenza dell’istituto di emissione, ma anche della ripartizione di competenze tra Stati e Unione. Dal 2012, un’ulteriore funzione è stata esercitata dalla Corte: la verifica della legittimità dell’intervento straordinario della BCE nell’economia per gestire le crisi. L’assenza nei trattati europei di disposizioni specifiche che contemplassero un ruolo della Banca come prestatore di ultima istanza o nella gestione delle crisi economiche e finanziarie spiega bene le contestazioni dell’ultimo decennio, così come la necessità di pronunce autorevoli da parte della Suprema Corte europea. Queste si collocano a buon diritto nel solco della giurisprudenza in tema di rule of law e di garanzia del rispetto dei principi generali nell’ordinamento europeo

Dualism in economic growth

Article originally published in Banca Nazionale del Lavoro Quarterly Review, vol. 12 n. 51, December 1959, pp. 386-434

Out in the cold? Outsiders and insiders in 1999: feasible and unfeasible options

Article originally published in “European Monetary Union: The Problems a Transition to a Single Currency”, supplement to Banca Nazionale del Lavoro Quarterly Review, n. 196 of March 1996, pp. 137-159

Effects of inflation on the distribution of income in Italy, 1953-1962

In the ten years 1953-62, the average price level in Italy rose every year, with the exception of 1959. The present article examines the effects of this inflationary process on income distribution. To do so the author first determines the extent to which each productive sector contributed to the creation of the total surplus of money product over real product, and how such excess was distributed amongst the various income categories in each sector. Then, the losses in real purchasing power these categories suffered are examined. Finally, the net outcome between gains in money product and losses for each category is found. According to the author, the data suggests peculiarly Ricardian features: the increase in prices was largely due to a rise in rents and of sectoral incomes in which are hidden some forms of rent, in the twofold aspect of privileged positions and inefficiency