Abstract: This paper investigates how different sources of income inequality shape individual preferences for redistribution across European regions. Using EU-SILC microdata and the intergenerational transmission of disadvantages modules (2005, 2011, and 2019), we construct regional measures of income inequality of opportunity across 132 European regions. These indicators are combined with individual-level data from the European Social Survey to examine how regional opportunity structures and individual exposure to disadvantaged circumstances affect redistributive preferences. Our results show that inequality of opportunity is a strong and robust
predictor of support for redistribution, while overall income inequality and inequality of effort display weak or insignificant effects. Individuals living in regions with higher inequality of opportunity are significantly more likely to support redistributive policies. In addition, we construct an individual-level opportunity disadvantage index capturing the probability of having experienced limited opportunities during income formation. This measure is also strongly associated with redistributive preferences, suggesting that both contextual and personal exposure to unfair inequality shape attitudes toward redistribution.
Paper nr. 505
Title: BREAKING THE DYNASTIC CYCLE: INEQUALITY, TAXATION, AND REDISTRIBUTION
Authors: Ismaila Y. Jammeh, Federico Giri and Alberto Russo
Abstract: This paper studies the long-run distributional effects of inheritance taxation and redistribution within an agent-based overlapping-generations model featuring heterogeneous agents who differ in demographics, returns to wealth, education, and consumption behaviour. The results show that progressive inheritance taxation combined with redistribution substantially reduces
wealth inequality, while consumption inequality declines more gradually and with a delay. This lag reflects lifecycle dynamics: younger households predominantly save transfers, whereas middle-aged households consume at peak earning stages. Importantly, these policies do not erode aggregate wealth. Instead, they reallocate wealth across households without shrinking
the total wealth stock. The top 1% and top 10% experience losses in both wealth shares and absolute wealth levels, while the bottom 50% gain in both dimensions. These effects intensify over time and become particularly pronounced after several decades, as redistribution translates into higher human capital accumulation and improved lifetime earnings for lower-wealth
households. Overall, the findings suggest that the conventional equity?efficiency trade-off is significantly weakened when tax revenues operate as a form of pre-distribution rather than mere ex post redistribution. In this framework, the true efficiency loss stems not from taxation, but from the long-run compounding of dynastic wealth concentration under policy inaction.
Paper nr. 504
Title: FEMALE POLITICAL LEADERS AND PUBLIC FUNDING ATTRACTION: EVIDENCE FROM ITALIAN MUNICIPALITIES
Abstract: We study the role of mayoral gender in attracting public funding in Italian municipalities. We exploit a novel administrative dataset containing detailed information on all projects aimed at the digitalisation of local public administrations and funded under Italy's National Recovery and Resilience Plan between 2022 and 2024. Exogenous variation in the timing of municipal elections and switches from male to female mayors provides quasiexperimental identification within a staggered difference-in-differences framework. We find that female mayors attract significantly larger amounts of national public funding for the digitalisation of municipal administrative services. This effect is particularly strong
when female leadership is combined with high levels of human, or supported by a high quality local bureaucrats, and a policy environment characterised by substantial funding opportunities. By contrast, the share of women in municipal councils and executives does not play a significant role. We also find that our main results are driven by small and territorially fragile municipalities.
Paper nr. 503
Title: A ROTATED DYNAMIC FACTOR MODEL FOR THE YIELD CURVE: SQUEEZING OUT INFORMATION WHEN IT MATTERS
Abstract: The yield curve is widely regarded as a powerful descriptor of the economy and market expectations. A common approach to its statistical representation relies on a small number of factors summarizing the curve, which can then be used to forecast real economic activity.
We argue that optimal factor extraction is crucial for retrieving information when considering an approximate factor model. By introducing a rotation of the model including cointegration, we reduce cross-sectional dependence in the idiosyncratic components.
This leads to improved forecasts of key macroeconomic variables during periods of economic and financial instability, both in the US and the euro area.
Paper nr. 502
Title: DO EXTERNAL THREATS AFFECT INTERNATIONAL RELATIONS? EVIDENCE FROM SMALL STATES NEIGHBOURING RUSSIA
Abstract: This study examines the impact of geopolitical shocks on public trust in international institutions, using the 2014 conflict in Ukraine as a quasi-natural experiment. Drawing on individual-level survey data from the Caucasus Barometer covering the period 2009?2019, we assess changes in trust in the European Union and the United Nations, as well as support for NATO membership, before and after the conflict among respondents in Georgia and Armenia. Although neither country was directly involved in the conflict, the crisis generated substantial geopolitical spillover throughout the South Caucasus. Employing a Difference-in-Differences design, we find a significant decline in trust toward these organizations in Georgia after 2014, a country characterized by a pro-Western foreign policy orientation and unresolved tensions with Russia, and therefore more exposed to the conflict's geopolitical consequences. In contrast, Armenia-more closely aligned with Russia and less directly affected-serves as a credible control case. We further examine how individual-level characteristics condition these effects. Our results show that individuals with a pro-Western identity, proxied by support for English as a mandatory school language, experienced smaller declines or even increases in institutional trust. Conversely, respondents with pro-Russian orientations exhibited significantly larger decreases in confidence. Overall, these findings highlight the polarizing effects of external geopolitical shocks and underscore the importance of cultural and political identity in shaping public attitudes toward international institutions in small states bordering Russia.
Paper nr. 501
Title: THESE JOBS ARE GOING, AND THEY AIN'T COMING BACK: INTERNAL MOBILITY IN RESPONSE TO MANUFACTURING DECLINE
Abstract: This paper investigates the impact of severe manufacturing crises on internal migration patterns across Italian local labour markets (LLMs) between 2000 and 2019. Leveraging a staggered difference-in-differences design, we estimate the causal effect of these shocks on the mobility of the working-age resident population. The results indicate a significant decline in net migration, primarily driven by an immediate reduction in inflows, which is nearly twice the size of the concurrent rise in outflows to other LLMs. We uncover substantial heterogeneity by citizenship, as foreign nationals are significantly less likely to migrate into affected areas following a crisis, while no systematic differences emerge by gender. The effects are more evident in district-based LLMs, moderately urbanized areas, and those located in Central and Northern Italy. The results
are robust across alternative model specifications and difference-in-differences estimators. These findings highlight the uneven impact of manufacturing decline on internal migration patterns across both population groups and LLM characteristics.
Paper nr. 500
Title: INEQUALITY, FINANCIALIZATION, AND POLITICAL DISINTEGRATION
Abstract: Drawing on Peter Turchin's structural-demographic theory, this paper provides a preliminary examination of how rising inequality and financial liberalization contribute to political instability through the interplay of mass immiseration and elite overproduction. We capture these dynamics through a simplified agent-based macroeconomic model, introducing two structural shocks { growing inequality and financial liberalization { that reect the transformations reshaping advanced economies in recent decades, a process intertwined with political disintegration. A wealth tax on the richest households can reduce political fragmentation and improve economic performance, but lasting resilience will require embedding such measures within a broader rethinking of the policy paradigm that has prevailed since the 1980s.
Paper nr. 499
Title: BURNING RAGE: HOW HEAT SHAPES GENDER-BASED VIOLENCE
Authors: Carmen Aina, Lavinia Parisi and Matteo Picchio
Abstract: We investigate the impact of temperature on gender-based violence (GBV) in Italy, focusing on femicides and calls to the 1522 helpline, a public service for victims of GBV and stalking. Both femicides and helpline calls increase significantly with warmer temperatures, particularly during elevated nighttime temperatures, suggesting that extreme heat may contribute to GBV by disrupting sleep or influencing social interactions. To better understand the underlying mechanisms, we consider key contextual factors at the provincial level. We find that environmental, social, and institutional factors interact in shaping
the response of GBV to heat.
Paper nr. 498
Title: INVESTIGATING COMMODITY PRICE INTERDEPENDENCE WITH GRANGER CAUSALITY NETWORKS.
Abstract: This paper investigates the interdependence among prices in the commodity and natural resource market segment. The analysis is performed using a large dataset made of about 50 commodity prices observed with monthly frequency over a period of almost half a century (1980-2024). These
different commodities are clustered in five groups (energy, metals, agriculture, food, other raw materials) in order to discriminate the interdependence within and between groups. The adopted method consists
in building a Commodity Price Network (CPN) defined via Granger causality tests. These tests are performed with two alternative empirical strategies: pairwise VAR models estimation (pairwise Granger Causality) and sparse VAR models estimation (sparse VAR Granger Causality). Both price levels and price first differences are considered in order to take the possible non-stationarity or price series into account. Network analysis is performed on the different networks obtained using these alternative series
and modelling approaches. Results suggest relevant differences across series and methods but some solid results also emerges, particularly pointing to a generalized interdependence that still assigns a central role to some metals and agricultural products.
Paper nr. 497
Title: THE IMPACT OF ENVIRONMENTAL POLICIES ON ADOPTERS UNDER GENERAL INTERFERENCE. THE CASE OF EU SUPPORT TO ORGANIC FARMING.
Abstract: This paper concerns the application of the Treatment Effect logic to the assessment of environmental policy measures. Staggered treatment entry is admitted and, unlike most literature in the field, both dynamic treatment effects (carryover effect or time interference) and spatial interference (contagion or spillovers) are admitted. This circumstance is referred to as
general interference. An appropriate theoretical framework is developed to integrate general interference in adopters? decision making. The identification and estimation approach adapts the procedure recently proposed by Wang (2023). This theoretical framework and estimation approach are applied to the adoption of organic farming in Italian agriculture under the EU support during period 2014-2022. Results confirm that disregarding one of these sources of interference may induce misleading evidence resulting in inappropriate policy conclusions.
