Ufuk Akcigit, Salome Baslandze, Francesca Lotti, 30 November 2018

Corruption, especially rent-seeking behaviour by politicians and firms, has adverse consequences for competition and ultimately growth. This column explores how political connections influence firms’ outcomes in Italy. The results point to a ‘leadership paradox’, whereby market-leading firms are more likely to be politically connected than their competitors, but less likely to innovate. At the aggregate level, political connections tend to be associated with worse industry dynamics, including lower entry, reallocation, growth, and productivity.

Maia Güell, Michele Pellizzari, Giovanni Pica, Sevi Rodriguez Mora, 26 November 2018

Measuring intergenerational mobility and understanding its drivers is key to removing the obstacles to equal opportunities and assuring a level playing field in access to jobs and education. This column uses the informational content of Italian surnames to show that social mobility varies greatly across regions in the country, and that it correlates positively with economic activity, education and social capital, and negatively with inequality. The findings suggest that policies and political institutions are unlikely to be the main drivers of geographical differences in social mobility.

Alfonso Rosolia, 14 September 2018

Given the role firms play in the transmission of monetary policy decisions, it is useful to understand how they form their inflation expectations. The column uses data from Italy to show that firms are attentive to the economic environment, even if they are not completely aware of the latest developments. They are also able to extract relevant information to update their expectations from ECB communications.

Audinga Baltrunaite, Cristina Giorgiantonio, Sauro Mocetti, Tommaso Orlando, 26 July 2018

Public procurement outcomes crucially depend on the ability of the procuring agency to select high-performing suppliers. This column uses Italian data to explore how public administrator discretion affects public resource allocation. Greater discretion results in reallocation towards politically connected, low-performing firms. These adverse effects are driven by lower-quality procuring agencies.

Francesca Carta, Lucia Rizzica, 26 June 2018

A growing number of advanced economies are opting for highly subsidised childcare systems. But studies have shown mixed effects of subsidised childcare on children’s outcomes, suggesting a potential trade-off between promoting female labour supply and providing the best care for children. This column shows that an expansion of subsidised childcare in Italy increased female labour supply without hurting children’s outcomes. Childcare could be made more cost-effective by making it conditional on the mother’s employment status, or incentivising firms to provide corporate childcare options.

Antonio Fatás, 16 June 2018

Ashoka Mody, 01 April 2018

Riccardo De Bonis, Giuseppe Marinelli, Francesco Vercelli, 16 April 2018

There is no consensus on how to measure competition in the banking system, though the 'Boone indicator' of profit elasticity with respect to marginal costs has recently provided reliable results. This column uses a dataset of 125 years of bank balance sheets to calculate this indicator for the Italian banking system. It shows that regulatory changes have driven bank competition, an insight that is supported by other indicators.

Ashoka Mody, 21 March 2018

Two European elections – in Germany on 24 September 2017 and Italy on 4 March 2018 – warn that the peoples of Europe are drifting apart. Much of the recent deepening of these divisions can be traced to Europe’s single currency, the euro. This column argues that the political divide in Europe may now be hard to roll back absent a shift in focus to national priorities that pay urgent attention to the needs of those being left behind.

Alexandra D'Onofrio, 07 March 2018

Weak bank lending and low corporate investment have plagued Europe since the Global Crisis. In this video, Alexandra D'Onofrio investigates whether there is a link between high debt before the Crisis and low investment during it, based on firms' choices about their financial structures. These findings can help  create institutional frameworks that help firms strengthen their finances and protect themselves from similar vulnerabilities in the future. This video was recorded at the RELTIF book launch held in London in January 2018.

Andrea Polo, 12 February 2018

European banks have responded in different ways to monetary interventions in the last few years. In this video, Andrea Polo discusses the central role monetary policy has taken in Europe, along with its limitations. While the ECB has created substantial liquidity through quantitative easing, these large injections of liquidity may not have been fully passed on to the real economy. This video was recorded at the RELTIF book launch held in London in January 2018.

Paolo Manasse, Dimitris Katsikas, 01 February 2018

The basic ingredients of the policy prescriptions in response to the euro area debt crisis were quite similar across Southern Europe. This column explores the economic, political, and institutional factors that differentially affected the success of these prescriptions from country to country. Policy timing and sequencing, the balance between fiscal consolidation and structural reforms, and external constraints all play crucial roles. Future reform programmes should be calibrated to the distinct economic, social, and political features of targeted countries.

Bruno Pellegrino, Luigi Zingales, 28 November 2017

Italy stands out among developed countries for its large public debt and chronically low productivity growth. The country’s productivity growth disease cannot be addressed without understanding why aggregate labour productivity abruptly stopped growing around 1995. This column argues that the most likely cause is Italian firms’ non-meritocratic managerial practices, which meant they failed to capitalise on the ICT revolution.

Giovanni Federico, Alessandro Nuvolari, Michelangelo Vasta, 06 November 2017

The origins of the Italian north–south economic divide have always been controversial. This column argues that using real wages in the 19th century, rather than output data, sheds new light on this debate. At unification, there was already a significant gap between real wages in the north and continental south, which widened as the north-west industrialised. The main driver of the growth of real wages in this period was human capital formation.

Pietro A. Bianchi, Antonio Marra, Donato Masciandaro, Nicola Pecchiari, 13 September 2017

Economic theory doesn’t provide a clear prediction on how a firm’s performance will be affected if some of its board members have ties to organised crime. This column explores this issue using a unique Italian dataset that includes confidential information about ongoing investigations. Seven percent of firms are found to have at least one director under investigation, and these firms demonstrate, on average, lower levels of cash holdings and worse profitability compared with ‘untainted’ firms.

Marta Auricchio, Emanuele Ciani, Alberto Dalmazzo, Guido de Blasio, 01 September 2017

The nature of the relationship between public and private employment is ambiguous, with studies showing that increased public employment can have both crowding-in and crowding-out effects on private employment. This column explores this relationship across Italian municipalities. It finds evidence of strong crowding-out effects across municipalities, which is partially explained by increased competition in the housing market.

Athanasios Orphanides, 06 June 2017

Results of actions taken by central banks across advanced economies in response to the Global Crisis have been uneven in allaying fears regarding debt sustainability. This column compares the cases of Italy and Japan to that of Germany to examine whether monetary policy actions since the crisis have become a more important driver of debt dynamics than fiscal policy actions. In contrast to Japan, where in the past few years decisive monetary policy actions have allayed fiscal concerns, in Italy monetary policy decisions appear to have contributed to debt sustainability concerns.  

Laura Bottazzi, Sarah Grace See, Paolo Manasse, 18 April 2017

Modern Italy has more inter-ethnic marriages – a consequence of recent immigration. This column uses recent census data to show that  inter-ethnic marriages in Italy have a significantly higher risk of separation, which persists even when accounting for spousal traits and self-selection. The difference is smaller for recent marriages, reflecting a more secular society.

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