Working paper 5/2018

Farsi male da soli
Disciplina esterna, domanda aggregata e il declino economico italiano

Sergio Cesaratto
Università di Siena


Gennaro Zezza
Università di Cassino e del Lazio Meridionale

Dicembre, 2018

Abstract: In questo saggio ripercorriamo la storia dell’economia italiana a partire dagli anni del miracolo economico, mostrando il ruolo della politica economica nelle sue diverse declinazioni (fiscale, monetaria, valutaria) nella determinazione della crescita, e poi del declino. Argomentiamo come i periodi della crescita siano caratterizzati dal tentativo di perseguire il pieno impiego, mentre il successivo periodo del declino è dipeso anche dal tentativo di risolvere i conflitti distributivi interni tramite vincoli esteri sempre più stringenti..

JEL codes: E52; E62; F41

Keywords: Italia; crescita; debito pubblico; saldi settoriali

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Working paper 4/2018

Job satisfaction, time allocation and labour supply

Gaetano Lisi
Dipartimento di Economia e Giurisprudenza, Università degli Studi di Cassino e del Lazio Meridionale

December, 2018

Abstract: This paper reinterprets the neoclassical theory of labour supply by introducing job satisfaction into the utility function of the worker. This integration is feasible and also straightforward from a theoretical point of view and, furthermore, it produces interesting results. Precisely, this extended version of the standard model of labour supply can describe situations in which working produces utility beyond consumption, with the result that the disutility of giving up leisure time is lowered or even reversed. As a result, the paper is able to reconcile the standard theory of labour supply with the well-established finding of happiness research, according to which working could yield substantial non-monetary benefits.

JEL codes: J28; J22; J24

Keywords: job satisfaction, time allocation, leisure, labour supply

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Working paper 3/2018

Shackle: an enquirer into choice

Marina BianchiSergio Nisticò
Dipartimento di Economia e Giurisprudenza, Università degli Studi di Cassino e del Lazio Meridionale

September, 2018

Abstract: Despite the several attempts to rework Shackle’s ideas using alternative non-mainstream approaches, Shackle was and has remained an outsider in the economic discipline. Shackle, however, is not a man alone if we take seriously what he thought of economics, as a discipline concerned with a subject that is not self-contained but open-ended and impermanent. Starting from an assessment of Schackle’s understanding of choice as creative, an uncaused cause that happens in a present in which the future must be imagined and for which the past provides no satisfyingly complete anticipations, the paper argues that Shackle should be rescued from the role of a nihilist where he is often relegated. In this perspective, a fundamental key to assessing the richness, originality and anticipatory character of Shackle’s contribution can be found in the recent developments of several “friendly” disciplines such as the psychology of motivations and of self-rewarding actions, narrative as the “science’ of the possible and the role of calendar time in choice theory. In fact, all these novel re-thinkings can contribute and to the understanding of Shackle’s main point, that human (and therefore economic) agents are active, creative enterprisers, who cut the deterministic thread by injecting the new in history to come, in making a difference in the future courses of action.

JEL codes: B31; D81; D91

Keywords: Shackle; Choice; Imagination; Time

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Working paper 2/2018

Problems, solutions and new problems with the third wave of technological unemployment

Fabio D’Orlando
Dipartimento di Economia e Giurisprudenza, Università degli Studi di Cassino e del Lazio Meridionale

July, 2018

Abstract: The aim of this paper is to discuss possible solutions to the “third wave” of technological unemployment and their main drawbacks. The process has just started and will only be fully realized in the future, but its main novelty is already well known and concerns robots (and artificial intelligence) entering the production process. Robots do not simply increase labor productivity, in cooperation with humans, but can totally substitute labor, making it possible to produce commodities without the use of human input. This in turn generates technological unemployment. Past “compensation” theories have argued that technological unemployment could be reabsorbed thanks to wage reduction and demand (and production) increase. But these theories have ignored robots. If robots are more productive and less expensive than humans, wage reduction may be insufficient due to the minimum wage subsistence boundary; and, in any case, an increase in demand would only determine an increase in the production of goods by robots alone, without any impact on human employment. Meanwhile, the resulting mass unemployment will require redistributive policies. The paper discusses the most relevant among these policies, emphasizing their drawbacks and their unwanted implications, and proposes an alternative rooted in Tietenberg’s tradable permits approach.

JEL codes: B12, D21, D30, E24, J64

Keywords: Technological unemployment, robots, artificial intelligence, unemployment, redistribution, compensation theory, tradable permits approach

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Working paper n.1/2018

Measuring economic vulnerability: a Structural Equation Modeling approach

Ambra Altimari – Simona Balzano – Gennaro Zezza
Dipartimento di Economia e Giurisprudenza, Università degli Studi di Cassino e del Lazio Meridionale

January, 2018

Abstract: The aim of this paper is to use a multivariate approach to improve the methodology for measuring the economic vulnerability of developing countries. The official index used by the United Nations, the Economic Vulnerability Index (EVI), is a composite indicator defined as the weighted average of a set of variables measuring i) the exposure to exogenous shocks and ii) the consequences of such shocks. We propose to extend the EVI model in order to include variables measuring resilience, i.e. the ability of a country to recover after a shock has occurred, and we evaluate the Structural Equation Model approach to compute a general vulnerability index. Since we analyse data covering 98 countries and 19 years we propose a strategy for dealing with repeated SEM results.

JEL codes: C33, F68, I32

Keywords: vulnerability, resilience, partial least squares, structural equation models

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Working paper n.1/2017

Informality and productivity: do firms escape EPL through shadow employment? Evidence from a regression discontinuity design

Giuseppina Gianfreda – Università della Tuscia and LLEE
Giovanna Vallanti – LUISS “Guido Carli” and LLEE

December, 2017

Abstract: Compliance with labour law has costs and benefits which may depend on the institutional environment in which firms operate. Although several studies have documented a negative effect of informality on firms productivity and growth it is a fact that firms may resort to undeclared employment to escape excessive tax or regulatory burden. We argue that firms may respond to strict employment protection legislation through accrued informality thus (partially) offsetting the negative effect of informality on productivity. We exploit the Italian dismissal legislation imposing higher firing costs for firms with more than 15 workers and show that informality reduces the turnover of formal jobs for firms above the 15 workers threshold; furthermore, while the overall effect of informality on firms productivity is negative, the differential effect for firms above the threshold as compared to smaller firms is positive and significant.

JEL codes: D02, D22, D24

Keywords: tax evasion, EPL, productivity, firm size, RD estimation

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Working paper 3/2016

Financialisation, Debt and Inequality: Export-led Mercantilist and Debt-led Private Demand Boom Economies in a Stock-flow consistent Model

Daniel Detzer

December, 2016

Abstract: In the era of financialisation, increasing income inequality could be observed in most developed and many developing countries. Despite these similar developments in inequality, the growth performance and drivers for growth differed markedly among countries, allowing clusters of different growth regimes to be identified. Among them are two extreme types: the debt-led private-demand boom and the export-led mercantilist economies. Whereas the former rely mainly on credit-financed household consumption in order to compensate for the potential lack of demand (associated with the depressing effect of financialisation), the latter rely on net exports as the main driver of aggregate demand. Using a stock-flow consistent model it will be demonstrated how increasing inequality, depending on a countries institutional structure and regulatory framework, affects growth differently, explaining the occurrence of both regime types.

JEL codes: E02 E12 E21 E25 E44 E65 F40 F41 F43

Keywords: international imbalances, finance-dominate capitalism, financialisation, debt, emulation, stock-flow consistent model

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Working Paper 2/2016

Autonomous government expenditure growth, deficits, debt and distribution in a neo-Kaleckian growth model

Eckhard Hein

July, 2016

Abstract: This paper is linked to some recent attempts at including a non-capacity creating autonomous expenditure category as the driver and determinant of growth into Kaleckian distribution and growth models. Whereas previous contributions have focussed on taming Harrodian instability, generated by the deviation of the goods market equilibrium rate of capacity utilisation from a normal or target rate of utilisation, we rather focus on the so far neglected issues of deficit, debt and distribution dynamics in such models. For this purpose we treat the growth of government expenditures on goods and services, financed by credit creation, as the exogenous growth rate driving the system. We examine the medium-run convergence of the system towards such a growth rate, analyse the related long-run debt dynamics and deal with stability and income distribution issues. Finally we touch upon the economic and, in particular, fiscal policy implications of our model results.

JEL codes: E11, E12, E25, E62

Keywords: Government deficits and debt, public expenditure growth, Kaleckian distribution and growth model

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Working Paper 1/2016

Some notes on Gossen’s ‘submerged and forgotten’ approach to consumption and time

Sergio Nisticò

January, 2016

Abstract: Hermann Heinrich Gossen (1810-1858) — a civil servant who, in 1854, published at his expense the book Entwickelung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln — has traditionally been considered a forerunner of the neoclassical theory of consumption based on the law of diminishing marginal utility.
It is only with the long-awaited publication, in 1983, of the English translation of Gossen’s book, that his editor, Nicholas Georgescu-Roegen, started to see in The Laws of Human Relations and the Rules of Human Action Derived Therefrom the roots of a wholly different theory of consumption in which the flow of calendar time plays a crucial and non-trivial role.
By going through the works of Jevons, Menger and Walras, the paper argues that the logical and theoretical connection between Gossen’s approach to consumption choices and the marginalist school is unwarranted. Theoretical connections, if any, can be found between Gossen and the classical economists on the one hand and the English ‘liberal’ tradition of John Stuart Mill and J.M. Keynes on the other.

JEL codes: B13; D01

Keywords: Gossen, Marginalist consumption Theory; Time.

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Working paper 2/2015

At the origin of the notion of “creative goods” in economics: Scitovsky and Hawtrey

Antonio Bariletti and Eleonora Sanfilippo

October, 2015

Abstract: The notion of “creativity” has assumed a growing importance in the recent economic literature on happiness, motivations and life-satisfaction. Starting from the seminal contribution of Scitovsky, the effects of “creative goods” and “creative activities” on consumers’ well-being, in connection with cultural, sociological, psychological and educational aspects, have been analyzed. An increasing interest in these concepts has also been shown recently by policy-makers and international institutions (see, e.g., the UNCTAD Reports on Creative Economy, 2010, 2013), in particular in relation to economic growth. On the other hand, a clear and rigorous analytical definition of this category of goods and activities and deep investigation of its peculiarity in comparison with other types of products and activities, broadly defined as comfort or defensive ones, is still lacking in the economic literature. This is why, despite its wide use in economics, the nature of the distinction still remains somehow vague and not univocal. The aim of this paper is to provide a contribution to help clarify this distinction by reconstructing its meaning and scope in the works of Scitovsky (1976, 1992) and Hawtrey (1925) – the first economists who have tried to provide an analytical content to the notion of creative goods and activities in their theoretical frameworks.

JEL codes: B31, B41, D01, D11

Keywords: Scitovsky, Hawtrey, Cambridge, creative goods, creative activities, consumers’ satisfaction, education, culture, cultural policy.

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