Current Features and Future Problems of the Italian Pension System

The paper analyzes the issue of the financial sustainability of the Italian Pension System in the long-run, by discussing the main reforms occurred in the last few years and by examining some recent data: in particular, the data of the Italian Agency for the Evaluation of Social Security Expenditure on the budget of specific funds of the Social Security System, like the Fund for Private Employees and the Funds for Public Employees, and moreover the OECD data on the evolution of the replacement rate between pension benefit and labour income. Observing the evolution over the period 1989-2006, we notice that the current deficit of the first pillar of the pension system is caused, much more than in the past, by the deficit of the Funds for Public Employees, for the relevant difference between the value of the benefits and of the contributions, which is not registered in the other funds.pay-as-you-go system ; retirement age ; defined contribution ; financial sustainability ; replacement rate ; private pension funds

Competition and Economic Growth: an Empirical Analysis for a Panel of 20 OECD Countries

This paper aims at analyzing, from an empirical point of view, the relationship between product market competition and economic growth, using the data on multi-factor productivity for a panel of 20 OECD countries over a period 1995-2005, and considering the role of the distance from the technological frontier in the growth process. Section A examines the impact of economic freedom and of the distance to frontier on the level and on the growth rate of multi-factor productivity. The analysis distinguishes between the indicators of business freedom and trade freedom, as proxies for the competitive pressures coming from domestic market and from foreign market. Then, trade liberalizations are more beneficial for the countries far from the frontier, because they can exploit the opportunities given by international trade also in order to adopt the existing technologies developed by the advanced economies. On the other hand, business liberalizations are more advantageous for the countries close to the frontier, because the elimination of regulatory barriers increases the possibility of entry in the market and then rises the potential competition to the incumbent firms. Section B studies the effect of product market regulation, employment protection legislation and of the distance to frontier on the level and on the growth rate of multi-factor productivity. Product market liberalization as well as labour market deregulation determine an increase of total factor productivity: moreover, the interaction of market rigidities with the distance to the frontier mostly displays an innovationenhancing effect, since the positive effect of market liberalizations on TFP is higher for the countries close to the frontier, where the existing technology level would reinforce the incentive for innovation.multi-factor productivity; economic freedom; product market regulation; employment protection legislation; distance to frontier

The interaction between antitrust and intellectual property : the interoperability issue in the Microsoft Europe case

The present work analyzes the interaction between antitrust policy and intellectual property protection, with particular reference to the cases of refusal to supply, when it concerns ideas or inventions protected by an IP right. For this purpose, the paper preliminarily discusses the governing principles of antitrust policy on abuse of dominance and refusal to deal, as they have been implemented in the decisions of the EU Competition Authority, and it presents the specific issues related to the implementation of antitrust policy in the innovative industries. Then, the paper examines in particular the Microsoft Europe Case, as decided by the European Commission in 2004, focusing on the issue of the interoperability between the operating systems for personal computers and the operating systems for work group servers. The theoretical model, developed as an extension of the framework proposed by Choi and Stefanadis (2001) to the case of refusal to deal, suggests an explanation of the case, alternative to the one adopted by the Commission, if not necessarily in the final outcome of the decision, at least in the analytical arguments and in the dynamics of the market structure. In particular, we show that the refusal to supply the compatibility between the two complementary products was determined not only by the intention to leverage its dominant position to the adjacent market of server operating systems, but especially by the concern for keeping the monopoly on its core market, that is the one of PC operating system, given the future evolution of the software market, due to the diffusion of cloud computing

Competition and Economic Growth: a Critical Survey of the Theoretical Literature

The paper examines the relationship between competition and economic growth, in the theoretical framework described by endogenous growth models, but with a specific interest in the policy implications. In this perspective, the key issue in the debate can be presented as follows: do competition policies always create the best conditions for promoting innovation and growth? Or do they also produce some disincentives for the investment decisions in R&D, such to limit the development of industries with higher innovation? In order to answer these questions, the paper presents a survey of the theoretical literature on competition and growth and it discusses the main models of endogenous growth, both the ones based on horizontal innovation, such as Romer (1990) or Rivera-Batiz and Romer (1991), and the ones based on vertical innovation, like Aghion and Howitt (1992) or Aghion, Dewatripont and Rey (1997). In particular, specific attention is paid to the most recent models of Schumpeterian growth, which show the existence of a non-linear relationship between competition and growth, by considering either the initial degree of competition (Aghion, Blundell, Bloom, Griffith and Howitt, 2005) or the distance from the technological frontier. (Acemoglu, Aghion and Zilibotti, 2006). Finally, the review of the previous models of endogenous growth allows to draw some conclusions about further and possible developments of research on the relation between product market competition and economic growth.expanding product varieties; increasing product quality; incentives for innovation; creative destruction; escape-competition effect; distance to frontier

Competition and Economic Growth: an Empirical Analysis for a Panel of 20 OECD Countries

This paper aims at analyzing, from an empirical point of view, the relationship between product market competition and economic growth, using the data on multi-factor productivity for a panel of 20 OECD countries over a period 1995-2005, and considering the role of the distance from the technological frontier in the growth process. Section A examines the impact of economic freedom and of the distance to frontier on the level and on the growth rate of multi-factor productivity. The analysis distinguishes between the indicators of business freedom and trade freedom, as proxies for the competitive pressures coming from domestic market and from foreign market. Then, trade liberalizations are more beneficial for the countries far from the frontier, because they can exploit the opportunities given by international trade also in order to adopt the existing technologies developed by the advanced economies. On the other hand, business liberalizations are more advantageous for the countries close to the frontier, because the elimination of regulatory barriers increases the possibility of entry in the market and then rises the potential competition to the incumbent firms. Section B studies the effect of product market regulation, employment protection legislation and of the distance to frontier on the level and on the growth rate of multi-factor productivity. Product market liberalization as well as labour market deregulation determine an increase of total factor productivity: moreover, the interaction of market rigidities with the distance to the frontier mostly displays an innovationenhancing effect, since the positive effect of market liberalizations on TFP is higher for the countries close to the frontier, where the existing technology level would reinforce the incentive for innovation

Off-balance sheet credit exposure and asset securitisation: what impact on bank credit supply?

The present paper analyzes two important aspects in the amplification process of the recent financial crisis to the real economy, that is the securitisation of financial assets (and in particular of loans and mortgages) and the growth of bank off-balance sheet activities, for instance through the development of Special Purpose Vehicles, with specific attention to the US context. In particular, this work aims to examine whether and how the increase in off-balance sheet credit exposure to credit derivatives, mainly due to loan securitisation, may have affected the growth rate of loans over the past few years, also by distinguishing different categories of loans. For this purpose, we present the results of a panel fixed-effect estimation and of a panel VAR analysis, using quarterly data from the balance sheets of 39 US commercial banks and for a period between 1998 and 2008. The results show that a rise in off-balance credit exposure may have – after some time lags - a negative impact on the growth rate of bank lending, due to the potential and actual losses related to the off-balance sheet activities. However, the effects on the single categories of loans depend on their maturity: the negative effect due to an increase in off-balance sheet exposure is stronger for long-term loans, like mortgages or real estate loans, while some positive impact on bank lending may arise for short-term loans, such as commercial and industrial loans, because of the liquidity/maturity transformation function associated with securitisation activities. The results of the paper regarding the impact of an increase in off-balance sheet exposures on bank deleveraging process may have some relevant policy implications for the design of financial regulation, particularly in the area of shadow banking, supporting the current policy initiatives for the revision of risk weights in securitisation exposures as well as for the implementation of consolidation regimes concerning bank off-balance sheet activities

Competition and Economic Growth: a Critical Survey of the Theoretical Literature

The paper examines the relationship between competition and economic growth, in the theoretical framework described by endogenous growth models, but with a specific interest in the policy implications. In this perspective, the key issue in the debate can be presented as follows: do competition policies always create the best conditions for promoting innovation and growth? Or do they also produce some disincentives for the investment decisions in R&D, such to limit the development of industries with higher innovation? In order to answer these questions, the paper presents a survey of the theoretical literature on competition and growth and it discusses the main models of endogenous growth, both the ones based on horizontal innovation, such as Romer (1990) or Rivera-Batiz and Romer (1991), and the ones based on vertical innovation, like Aghion and Howitt (1992) or Aghion, Dewatripont and Rey (1997). In particular, specific attention is paid to the most recent models of Schumpeterian growth, which show the existence of a non-linear relationship between competition and growth, by considering either the initial degree of competition (Aghion, Blundell, Bloom, Griffith and Howitt, 2005) or the distance from the technological frontier. (Acemoglu, Aghion and Zilibotti, 2006). Finally, the review of the previous models of endogenous growth allows to draw some conclusions about further and possible developments of research on the relation between product market competition and economic growth

Competition and Economic Growth: an Empirical Analysis for a Panel of 20 OECD Countries

This paper aims at analyzing, from an empirical point of view, the relationship between product market competition and economic growth, using the data on multi-factor productivity for a panel of 20 OECD countries over a period 1995-2005, and considering the role of the distance from the technological frontier in the growth process. Section A examines the impact of economic freedom and of the distance to frontier on the level and on the growth rate of multi-factor productivity. The analysis distinguishes between the indicators of business freedom and trade freedom, as proxies for the competitive pressures coming from domestic market and from foreign market. Then, trade liberalizations are more beneficial for the countries far from the frontier, because they can exploit the opportunities given by international trade also in order to adopt the existing technologies developed by the advanced economies. On the other hand, business liberalizations are more advantageous for the countries close to the frontier, because the elimination of regulatory barriers increases the possibility of entry in the market and then rises the potential competition to the incumbent firms. Section B studies the effect of product market regulation, employment protection legislation and of the distance to frontier on the level and on the growth rate of multi-factor productivity. Product market liberalization as well as labour market deregulation determine an increase of total factor productivity: moreover, the interaction of market rigidities with the distance to the frontier mostly displays an innovationenhancing effect, since the positive effect of market liberalizations on TFP is higher for the countries close to the frontier, where the existing technology level would reinforce the incentive for innovation

Current Features and Future Problems of the Italian Pension System

The paper analyzes the issue of the financial sustainability of the Italian Pension System in the long-run, by discussing the main reforms occurred in the last few years and by examining some recent data: in particular, the data of the Italian Agency for the Evaluation of Social Security Expenditure on the budget of specific funds of the Social Security System, like the Fund for Private Employees and the Funds for Public Employees, and moreover the OECD data on the evolution of the replacement rate between pension benefit and labour income. Observing the evolution over the period 1989-2006, we notice that the current deficit of the first pillar of the pension system is caused, much more than in the past, by the deficit of the Funds for Public Employees, for the relevant difference between the value of the benefits and of the contributions, which is not registered in the other funds