Forecasting the industrial production index for the euro area through forecasts for the main countries

The aim of the present work is to obtain short-term predictions of the monthly volume of the industrial production of the euro area. Preliminary information on the behaviour of this variable is needed, since the index is released with a lag of about two months. A model based on the US industrial production index and on the single-country forecasts of the production indices for the main euro-area countries is proposed.prediction, industrial production, forecast combination, encompassing

Does the Underground Economy Hold Back Financial Deepening? Evidence from the Italian Credit Market

The paper investigates the relationship between underground activities and financial deepening. The access to external finance requires entrepreneurs to disclose credible information through formal documentation. This requirement may be impossible to oblige to for many informal producers who lack a proper book-keeping of their operations. For the same reason irregular workers may find difficult to borrow for financing both consumption and housing purchase. Using panel data on Italian regional credit markets we find a strong negative impact of the share of irregular employment on outstanding credit to the private sector. According to our estimates a shift of 1 per cent of the employees from regular activities to irregular ones corresponds to a decline of about 2 percentage points in the volume of business lending and of 0.3 percentage points in outstanding credit to households, both expressed as ratios to GDP. Conversely, the feedback effects from financial deepening to the size of the informal sector are weak and statistically not significant. Through a difference-in-difference approach exploiting the regularisation program for immigrant workers launched in 2002 we also identify a negative effect of the irregular labour on banks' entry decisions in the local credit markets, now defined in terms of provinces.irregular employment, bank lending, school drop-out, entry, branching, regularisation programme

Dropping the books and working off the books

irregular employment, underground economy, dual informal sector, occupational choice, education, school drop-out, North and South divide Abstract: The paper empirically tests the relationship between underground labour and schooling achievement for Italy, a country ranking badly in both respects when compared to other high-income economies, with a marked duality between North and South. In order to identify underground workers, we exploit the information on individualsÂ’ social security positions available from the Bank of ItalyÂ’s Survey on Household Income and Wealth. After controlling for a wide range of socio-demographic and economic variables and addressing potential endogeneity and selection issues, we show that a low level of education sizeably and significantly increases the probability of working underground. Switching from completing compulsory school to graduating at college more than halves this probability for both men and women. The gain is slightly higher for individuals completing the compulsory track with respect to those having no formal education at all. The different probabilities found for self-employed and dependent workers support the view of a dual informal sector, in which necessity and desirability coexist.

Income reporting behaviour in sample surveys

This paper analyses respondents' behaviour when reporting their income sources in sample surveys and presents a method to deal with response error. Survey data relating to the number of earning recipients and to amounts received are validated using external information from administrative and statistical sources. Our findings suggest that the response bias on household income is about 12 per cent of reported figures. Misreporting is particularly severe for income from self-employment, financial assets and rents, as well as from secondary jobs. As to the distribution of response error, about 15 per cent of respondents show a high probability of misreporting. Misreporting is more diffuse among males, the older, the self-employed and respondents at the higher end of the earnings distribution.income distribution, response error, item response theory, SHIW, data accuracy.

(Non)persistent effects of fertility on female labour supply

The negative association between fertility and female labour market participation is complicated by the endogeneity of fertility. We address this problem by using an exogenous variation in family size caused by infertility shocks, mainly related to the fact that nature prevents some women from achieving their desired fertility levels. Despite a widely documented reduction of female labour supply around childbirth, using the Bank of Italy's SHIW we find that this effect dissipates over time, with some clues of penalties related to job quality. Results are confirmed exploiting the Istat Birth Survey, with insights of a different impact according to the age of the child.participation, children, motherhood, female employment rate, Italy

Circular Languages Generated by Complete Splicing Systems and Pure Unitary Languages

Circular splicing systems are a formal model of a generative mechanism of circular words, inspired by a recombinant behaviour of circular DNA. Some unanswered questions are related to the computational power of such systems, and finding a characterization of the class of circular languages generated by circular splicing systems is still an open problem. In this paper we solve this problem for complete systems, which are special finite circular splicing systems. We show that a circular language L is generated by a complete system if and only if the set Lin(L) of all words corresponding to L is a pure unitary language generated by a set closed under the conjugacy relation. The class of pure unitary languages was introduced by A. Ehrenfeucht, D. Haussler, G. Rozenberg in 1983, as a subclass of the class of context-free languages, together with a characterization of regular pure unitary languages by means of a decidable property. As a direct consequence, we characterize (regular) circular languages generated by complete systems. We can also decide whether the language generated by a complete system is regular. Finally, we point out that complete systems have the same computational power as finite simple systems, an easy type of circular splicing system defined in the literature from the very beginning, when only one rule is allowed. From our results on complete systems, it follows that finite simple systems generate a class of context-free languages containing non-regular languages, showing the incorrectness of a longstanding result on simple systems

The euro and firm restructuring

We test whether and how the adoption of the euro, narrowly defined as the end of competitive devaluations, has affected member states’ productive structures, distinguishing between within and across sector reallocation. We find evidence that the euro has been accompanied by a reallocation of activity within rather than across sectors. Since its adoption, productivity growth has been relatively stronger in country-sectors that once relied more on competitive devaluations to regain price competitiveness. This effect is robust to potential omitted-variable bias and correlated effects. Firm-level evidence from Italian manufacturing confirms that low-tech businesses, which arguably benefited most from devaluations, have been restructuring more since the adoption of the euro. Restructuring has entailed a shift of business focus from production to upstream and downstream activities, such as product design, advertising, marketing and distribution, and a corresponding reduction in the share of blue collar workers.euro, devaluations, productivity growth, firm restructuring, skill intensity

Vertical specialisation in Europe: Evidence from the import content of exports

We use input-output tables to estimate the import content (IC) of exports for several European countries, interpreting this as a measure of internationalisation. Between 1995 and 2000 the IC grew everywhere but in France; the transport equipment sector emerged as the most internationalised one. The change we detect for a set of EMU countries is remarkable when compared with previous estimates over the 20-year period between 1970 and 1990. Italy and Germany showed very different patterns, although both started from a very low level of IC. Italy experienced the weakest growth and Germany the most sizeable rise. We argue that Italian firms might have felt less pressured to transform their organisation due to the delayed effects of the 1992 and 1995 Lira crises.external trade, outsourcing, import content, input-output analysis

Aristotle, the Agricultural Democracy, and the Aphytaians (Pol. 6, 1319a 14-19)

Aristotle normally used historical notations to support his arguments. This is somewhat true for all the works of the corpus, but above all for Politics: the nature, objectives, and methodology of the investigations in this treatise present the strongest links with actual and concrete data, and therefore with historia. Obviously even the Aristotle of Politics is not a historian who wants to report known historiographical traditions; however, regardless of his intentions, there is no doubt that the work in question (more than all the others attributed to the philosopher) contains precious ‘fragments’ of history which, in general, confirm or supplement our knowledge. There are, however, cases in which the Aristotelian exempla end up filling in the omissions and gaps of the available sources, such as the cursory reference to the nomos of the Aphytaians, which appears in the section of Book 6 dedicated to the so-called agricultural democracy