Joan Costa-Font, Rosella Levaggi, Gilberto Turati, 20 September 2020

While competition between publicly funded hospitals seems to improve efficiency and the quality of care in ‘normal’ times, during a pandemic certain types of disintegrated hospital competition models can compromise the necessary stewardship of the system, and give rise to a larger number of fatalities. This column presents a regional comparison of the healthcare systems in three Italian regions that were severely hit at the beginning of the Covid-19 pandemic. The analysis suggests that an integrated model can provide a swifter reaction to an outbreak by minimising coordination efforts as well as  information costs.

Brian Nolan, Juan C. Palomino, Philippe Van Kerm, Salvatore Morelli, 19 September 2020

Whether and how much intergenerational transfers contribute to wealth inequality is still subject to debate. This column analyses household survey data on inheritance and gifts inter vivos in France, Germany, Great Britain, Ireland, Italy, Spain, and the US to relate current household wealth levels and inequality to the receipt of intergenerational wealth transfers. In these countries, large transfers increase overall wealth inequality. Strengthening taxation capacity and instating lifetime capital acquisitions tax for gifts and inheritances may help counter the dis-equalising effect of intergenerational transfers.

Lorenzo Codogno, Giancarlo Corsetti, 18 September 2020

The EU Recovery Plan agreed upon in July 2020 supports investment activity through grants and loans to member states at close-to-zero interest rates. This column suggests that its implementation could give a substantial boost to the economy and fiscal revenues under very conservative assumptions on multipliers. In addition, as the ECB is keeping interest rates and government bond yields low, also through its asset purchase programmes, if it refrains from reacting forcefully to potential upward pressures on prices caused by the massive fiscal stimulus, even a gradual and delayed ‘normalisation’ of interest rates would not undermine debt sustainability. 

Michele Valsecchi, Ruben Durante, 02 September 2020

Many internal migrants returned to their place of origin after the initial outbreaks of COVID-19 and before national lockdowns were in place. Has this behaviour contributed to the further spread of the pandemic and to its heavy death toll? Looking at the case of Italy and using data on the place of origin and destination of internal migrants, this column finds that provinces more exposed to return migration from areas hit by the pandemic earlier on experienced considerably more COVID-19 deaths in the ensuing months.

Sebastian Blesse, Massimo Bordignon, Pierre C Boyer, Piergiorgio Carapella, Friedrich Heinemann, Eckhard Janeba, Anasuya Raj, 18 August 2020

The ongoing Covid-19 crisis has the potential to change the institutional design of the European Union (EU). This column analyses survey data asking parliamentarians from France, Italy, and Germany about their stances on a broad range of reform issues covering fiscal and monetary policies as well as EU governance mechanisms. It finds that in general, party membership is quantitatively more important than nationality in determining political stances. Further, while national parliaments still differ on many policies, a broader consensus emerges for reforms on EU institutions such as providing the EU parliament with the right of proposing new legislation.

Marco Le Moglie, Giuseppe Sorrenti, 01 August 2020

Criminal organisations invest vast sums of money within the legal economies of many countries worldwide. These investments provide criminal organisations with a powerful tool to raise forms of social consensus in some portions of the population. This column provides a characterisation of organised crime’s investment in Italy’s legal economy, a country historically plagued by the presence of criminal groups. The results indicate that during periods of economic and social downturn, organised crime may capitalise on the weaknesses of the institutional response to the crisis, consolidating and possibly expanding, its role as an investor in the legal economy.

Paolo Pinotti, 01 August 2020

Understanding the economic incentives and consequences of crime is an important area of research with immense policy implications, but it is not without challenges. This column summarises new evidence from studies on the causes and consequences of crime in Italy, focusing on recent improvements that address challenges related to the measurement of crime and to the identification of a clear effect of crime on economic outcomes.

Michèle Belot, Syngjoo Choi, Egon Tripodi, Eline van den Broek-Altenburg, Julian C. Jamison, Nicholas W. Papageorge, 24 July 2020

Almost all countries in the world have implemented drastic measures to contain the COVID-19 pandemic. This column documents the effects of the epidemic and containment measures using representative individual data on age and income from three Western and three Asian countries. Younger groups in all countries have been affected more, both economically and non-economically. Differences across income groups are less clear and less consistent across countries. The young are less compliant and supportive of the containment measures, no matter how hard they have been affected by them.

Fabiano Schivardi, Guido Romano, 18 July 2020

The COVID-19 crisis has induced a sharp drop in cash flow for many firms, possibly pushing solvent but illiquid firms into bankruptcy. This column presents a simple method to determine the number of firms that could become illiquid, and when. The authors apply this method to the population of Italian businesses and find that at the peak, around 200,000 companies (employing 3.3 million workers) could become illiquid due to a total liquidity shortfall of €72 billion euros. It is essential that policymakers shelter businesses by acting quickly, especially if there is a ‘second peak’ after the summer.

Mario Francesco Carillo, Tullio Jappelli, 14 July 2020

Many developing countries do not have adequate health infrastructure or the capacity to effectively implement lockdown policies to contain the spread of COVID-19. This column studies the historical experience of Italy during the 1918 Great Influenza in order to shed light on the consequences of pandemics in societies where it is difficult to implement lockdown policies or where healthcare systems are lacking. Using regional GDP and mortality data, it finds a strong negative effect of the pandemic on local economic growth. However, these adverse effects mostly dissipated three years after the pandemic.

Emanuele Ciani, Guido de Blasio, Samuele Poy, 11 July 2020

Large transportation infrastructure projects are considered a promising investment to spur economic growth in lagging areas by many policymakers. This column presents historical evidence that questions this assumption. It studies the most important Italian infrastructure project in the aftermath of WWII: the 440km freeway connecting the Southern regions of Italy. It finds, that while the freeway caused a significant reorganization of both economic activity and population from places far from the freeway to locations close to it, there is no evidence that it had any long-run effect on economic growth of the Southern region as a whole.

Stefano Federico, Fadi Hassan, Veronica Rappoport, 25 June 2020

In a period where the backlash against trade and globalisation is at historical high point, it is crucial to understand the frictions that prevent a full realisation of the gains from trade. This column takes evidence from Italy and contributes to the debate by identifying a novel channel: the endogenous funding constraint of banks whose loan portfolios are affected negatively by the liberalisation. There are spillovers between ‘losers’ and ‘winners’ from trade that operate through banks, which hinder the reallocation of resources towards firms that should actually expand after the liberalisation.

Elena Carletti, Tommaso Oliviero, Marco Pagano, Loriana Pelizzon, Marti Subrahmanyam, 19 June 2020

The COVID-19 induced crisis has caused severe distress for the economy. This column estimates the profit and equity shortfalls triggered by the COVID-19 shock for a representative sample of Italian companies, including large, medium and small companies. A three-month lockdown is found lead to an aggregate annual drop in profits of €170 billion, with an implied equity erosion of €117 billion. Some 17% of all firms, employing over 800,000 workers, are estimated to face severe distress. Small and medium enterprises are affected disproportionately, with 17.2% of affected compared with 6.4% of large firms.

Alina Kristin Bartscher, Sebastian Seitz, Sebastian Siegloch, Michaela Slotwinski, Nils Wehrhöfer, 18 June 2020

In the absence of viable medical responses to combat the ongoing Covid-19 pandemic, policymakers have appealed to the social responsibility of their citizens to comply with social distancing rules. This column explores how regional differences in social capital can affect the spread of Covid-19, focusing on seven European countries. The results suggest that areas with high social capital registered between 12% and 32% fewer Covid-19 cases from mid-March until mid-May. A case study of Italy validates the independent role of social capital, showing a consistent reduction in excess deaths and documenting a reduction in mobility prior to the lockdown as a mediating channel.

Annie Tubadji, Don Webber, Frederic Boy, 10 June 2020

The general public’s mental health can be affected by different public policy responses to a pandemic threat. Italy, the UK and Sweden implemented distinct approaches to the COVID-19 pandemic: early lockdown, delayed lockdown, and no lockdown. This column presents a novel culture-based Development approach using narrative economics of language and Google trend data. It is evident that countries had a pre-existing culturally relative dispositions towards death-related anxiety and their sensitivity to COVID-19 public policy was country-specific. Further, one country’s lockdown policy can affect another country’s mental health, suggesting that policymakers should account for this spillover effect.

Christelle Baunez, Mickael Degoulet, Stéphane Luchini, Patrick Pintus, Miriam Teschl, 10 May 2020

Tests are crucial to detect people who have been infected by COVID-19 and to observe in real time whether the dynamics of the pandemic are accelerating or decelerating. However, tests are a scarce resource in many countries. This column proposes a data-driven and operational criterion to allocate tests efficiently across regions, with a view to maximising the fraction of tested people who are positive. When applied to Italian regions, the criterion reveals that the shares of tests that should go to each region differ significantly from the present distribution.

Massimo Morelli, 08 May 2020

Political participation is an important, and often neglected, channel through which economic insecurity, reductions in trust, and changes in cultural attitudes all affect populism. This column argues both the demand for and supply of populism depend on mobilisation, and that populism can be seen as a mobilisation campaign strategy. While this framework explains the recent surge of populism, it also provides reasons to believe that the populism wave could be temporary. The column also discusses possible consequences of the Covid-19 crisis for populists in and out of power.

Teresa Barbieri, Gaetano Basso, Sergio Scicchitano, 27 April 2020

Many countries are now designing exit strategies from the sectoral lockdowns put in place to contain the outbreak of Covid-19. This column provides new evidence from Italy on the degree of workplace risk of exposure to the virus. Unsurprisingly, the health sector is the most exposed to diseases and infections, while the services sector is the most risky in terms of physical proximity. These and other findings can help in deciding which activities to reopen first and where to reinforce security measures.

Ester Faia, Maximilian Mayer, Vincenzo Pezone, 26 April 2020

Directors of corporations often sit on several boards at once. This column asks whether this connectivity is beneficial for firm value (due to a wider network of knowledge sharing), or if it is simply crony-capitalism built on a deep exclusivity at the board level. Exploiting data from Italy, the authors suggest that network centrality may not always translate into a gain for consumers, and that policymakers must be cautious in accommodating the appropriate reactions for cases that may have different implications for consumer welfare.

Gabriele Ciminelli, Sílvia Garcia-Mandicó, 22 April 2020

Among the many unknowns about COVID-19 are its true mortality rate and the speed at which it spreads across communities. This column analyses daily death registry data for a sample of 1,161 Italian municipalities in the seven regions most severely hit by COVID-19.  The findings suggest that the virus may have killed 0.1% of the local population in just over a month and that its mortality is vastly underreported in official statistics, plausibly by a factor of two. But there is also good news for policymakers – in the Veneto region, which has embraced mass testing, contact tracing, and at-home care provision, COVID-19-induced mortality is significantly lower than in neighbouring Emilia-Romagna and Lombardia.



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