Abstract: This paper analyzes the macroeconomic and distributional implications of central banks' decisions to raise interest rates after a prolonged period at near the Zero Lower Bound (ZLB). The main goal of our study is to assess the interaction between monetary policy, inequality, and financial fragility, in a financialized economic system. Financialization
is here portrayed as the presence in the economy of complex financial products, i.e., asset-backed securities, produced via the securitization of banks' loans. We do so in the context of a hybrid Agent-Based Model (ABM). We first compare the prevailing macroeconomic and nancial features of a low interest rate environment (LIRE) with respect to a "Great Moderation"(GM)-like setting. As expected, we show that LIRE tends to stimulate faster growth and higher employment, and to reduce income and wealth inequality, as well as (poor) households' indebtedness. Consistent with existing
empirical literature, this comes at the cost of higher inflation and some signs of financial system's fragility, i.e., lower banks' profitability and Capital Adequacy Ratio (CAR), and higher "search for risk" given by credit extension to poorer households. We then show that increases in the central bank's policy rate, as motivated by the central bank's willingness
to reduce inflation, effectively curb price dynamics and accomplish with central bank's inflation targeting mandate. Higher interest rates also improve commercial banks' CAR and profitability. However, they also cause a pronounced increase in non-performing loans (stronger than what possibly observed in a GM scenario) and some worrisome
macro-financial dynamics. In fact, higher interest rates give rise to higher households' and overall economy indebtedness as allowed by wealthier households' demand for highyield complex financial products and mounting securitization. We finally show how financialization structurally changes the functioning of the economy and the behavior of
central banks. Financialization actually contributes to create a (private sector) debt-led economy, which becomes structurally more resistant to central bank's attempts to control inflation. Central bank's reaction in terms of higher interest rates could likely come with perverse distributional consequences.
Paper nr. 480
Title: PERSISTENCE OF R&D INTENSITIES IN THE WORLD'S TOP INVESTORS IN R&D
Authors: Claudia Pigini, Alessandro Sterlacchini, Francesco Valentini
Abstract: There is extensive empirical evidence of a within-sector heterogeneity in terms of firms'
R&D intensity (share of expenditures on sales) which, moreover, does not converge to a
common level over time. Using a balanced panel of the world's top R&D investors, we
first investigate whether there is a different degree of time persistence along the R&D
intensity distribution. Secondly, we analyse whether the persistence in and the transition
to different levels are heterogeneous between four R&D-intensive sectors. As a general
result, we find that companies starting with low R&D intensities are more likely to move
towards the sector medium levels than those exerting a high innovative effort, which
persist in the right tail of the distribution. With the exception of the Pharmaceutical
sector, company size affects negatively (positively) the persistence and the entry rate
into the top (bottom) 20% of the R&D intensity distribution. Differences across sectors
emerge with respect to the impact of other company characteristics (profitability, capital
investment, and location)
Paper nr. 479
Title: PUBLIC HEALTH EFFICIENCY AND WELL-BEING IN ITALIAN PROVINCE
Abstract: Health is a fundamental human right, and good health is an essential component
of well-being; therefore, an ecient public health system is required to
achieve well-being in society. This paper analyses the relationship between
public health eciency and well-being considering a panel of 102 Italian
provinces from 2000 to 2016. The results show that public health eciency
enhances well-being in Italian provinces, especially in the North. The ndings
could help policymakers adopt measures to strengthen the public health
system, encourage private providers, and inspire countries worldwide.
Paper nr. 478
Title: INTERGENERATIONAL SCARS: THE IMPACT OF PARENTAL UNEMPLOYMENT ON INDIVIDUAL HEALTH LATER IN LIFE
Abstract: This paper studies whether individuals that experienced parental unemployment during
their childhood/early adolescence have poorer health once they reach the adulthood. We
used data from the German Socio-Economic Panel from 2002 until 2018. Our identification
strategy of the causal effect of parental unemployment relied on plant closures
as exogenous variation of the individual labor market condition. We combined matching
methods and parametric estimation to strengthen the causal interpretation of the estimates.
On the one hand, we found a nil effect for parental unemployment on mental health. On
the other hand, we detected a negative effect on physical health. The latter is stronger
if parental unemployment occurred in early periods of the childhood, and it is heterogeneous
across gender. The negative effect of parental unemployment on physical health
may be explained by a higher alcohol and tobacco consumption later in life.
Paper nr. 477
Title: ENERGY EFFICIENCY GAINS FROM MULTINATIONAL SUPPLY CHAINS: EVIDENCE FROM TURKEY
Authors: Michele Imbruni, Alessia Lo Turco, Daniela Maggioni
Abstract: We inspect whether multinational supply chains bring energy efficiency gains to
domestic firms active in a host country. Our theoretical model suggests that the
presence of foreign firms in upstream manufacturing and energy industries expands
the availability of high-quality inputs for downstream domestic firms, implying
a reduction in their energy intensity. We test these theoretical predictions using
data from Turkish manufacturing firms over the period 2010-2015. Our empirical
analysis shows that domestic-owned firms in sectors that are more likely to buy
manufacturing and energy inputs from foreign-owned suppliers tend to reduce their
energy intensity, confirming environmental gains from FDI. When exploring the
underlying mechanisms, we provide evidence that the presence of foreign firms in
upstream sectors leads to an increase in the quality of available inputs which turns
into improvements in downstream domestic firms' energy efficiency.
Paper nr. 476
Title: LOCAL LABOUR TASKS AND PATENTING IN US COMMUTING ZONES
Authors: Marialuisa Divella, Alessia Lo Turco, Alessandro Sterlacchini
Abstract: In this paper we adopt a task approach to measure the local pool of capabilities
which can more effectively spur innovation. By focusing on the core activities that
workers undertake in their jobs, we build an abstract task intensity measure of occupations
to proxy the ability in analysing and solving complex problems, as well as
in coordinating and integrating people with different knowledge endowments, that
should be especially relevant for the process of invention and innovation. We thus
estimate the relationship between the local abstract intensity and the inventive performance,
proxied by granted patents, of US Commuting Zones during the period
2000-2015. The evidence provided, robust to a wide array of sensitivity checks,
points to the extent of workers' engagement in abstract tasks across Commuting
Zones as a crucial determinant of the local inventive activity.
Paper nr. 475
Title: ESTIMATING THE IMPACT OF POLICIES UNDER SPATIAL INTERFERENCE. THE CASE OF CAP SUPPORT TO ORGANIC FARMING.
Abstract: This paper deals with the identification and estimation of a policy impact
taking spatial interference explicitly into account. Most literature on
treatment-effect estimation excludes this spatial interference by
assumption but in several policies spatial interference is very likely to
occur as well-known economic forces make contiguity affect both
treatment assignment and effect. The paper develops two alternative
spatially explicit estimation approaches to take these economic forces
into account. These approaches are applied to the support for the
adoption of organic farming within the Common Agricultural Policy.
The Italian 2008-2020 Farm Accountancy Data Network (FADN)
sample is considered. Results suggest that spatial interference occurs
and it is relevant in both treatment assignment and impact. Propensity
Score Matching approaches seem more suitable to capture this
Paper nr. 474
Title: INEQUALITY-CONSTRAINED MONETARY POLICY IN A FINANCIALIZED ECONOMY
Authors: Luca Eduardo Fierro, Federico Giri, Alberto Russo
Abstract: We study how income inequality affects monetary policy through the inequality household
debt channel. We design a minimal macro Agent-Based model that replicates several stylized facts,
including two novel ones: falling aggregate saving rate and decreasing bankruptcies during the household's
debt boom phase. When inequality meets financial liberalization, a leaning against-the-wind strategy can
preserve financial stability at the cost of high unemployment, whereas an accommodative strategy, i.e. lowering the
policy rate, can dampen the fall of aggregate demand at the cost of larger leverage.
We conclude that inequality may constrain the central bank, even when it is not explicitly targeted.
Abstract: Sulla base di indicatori economici standard (valore aggiunto, occupazione, produttivita' del lavoro) questo rapporto evidenzia l'andamento declinante dell'economia marchigiana nel decennio 2010-2019. Diversamente da regioni come il Veneto, l'Emilia-Romagna e la Toscana, le Marche non sono state in grado di recuperare i livelli occupazionali e di attivita' economica registrati prima della crisi internazionale del 2008. Dopo la flessione del 2020, dovuta alla crisi pandemica, il recupero nel corso del 2021 e nella prima parte del 2022 non e' stato sufficiente a ripristinare livelli del 2019. Le Marche rischiano quindi di rimanere intrappolate su un sentiero di bassa crescita. Le misure atte a invertire questa tendenza vanno al di la' degli scopi di questo rapporto preliminare e dovranno essere oggetto di ulteriori e puntuali approfondimenti.
Paper nr. 472
Title: UNSAFE TEMPERATURES, UNSAFE JOBS: THE IMPACT OF AMBIENT TEMPERATURES ON WORK RELATED INJURIES
Abstract: We estimate the impact of temperatures on work related accident rates in Italy by using daily data on weather conditions matched to administrative daily data on work related accidents. The identification strategy of the causal effect relies on the plausible exogeneity of short-term daily temperature variations in a given spatial unit. We find that both high and cold temperatures impair occupational health by increasing workplace injury rates. The positive effect of warmer weather conditions on work related accident rates is larger for men, in manufacturing and service sectors, and for workplace injuries. Colder temperatures are particularly harmful for commuting accidents and in rainy days.
Dipartimento di Scienze Economiche e Sociali (Di.S.E.S)
Università Politecnica delle Marche
Piazzale Martelli 8, 60121 Ancona