if this message does not display correctly, click here | Table of Contents Luca Brugnolini, Central Bank of Malta Research Department, University of Rome Tor Vergata Department of Economics and Finance
Luisa Corrado, University of Rome Tor Vergata Department of Economics and Finance Carlo Ciccarelli, University of Rome, Tor Vergata - Faculty of Economics
Alberto Dalmazzo, University of Siena - Department of Economics
Daniela Vuri, University of Rome Tor Vergata, IZA Institute of Labor Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Andrea De Meo, University of Rome 'Tor Vergata'
Lorenzo Ferrari, University of Rome, Tor Vergata - Department of Economics and Finance | |
CEIS: CENTRE FOR ECONOMIC & INTERNATIONAL STUDIES
Vincenzo Atella - Director "Fiscal Compact and Debt Consolidation Dynamics" 
CEIS Working Paper No. 436 LUCA BRUGNOLINI, Central Bank of Malta Research Department, University of Rome Tor Vergata Department of Economics and Finance
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LUISA CORRADO, University of Rome Tor Vergata Department of Economics and Finance
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We analyse the macroeconomic effects of a debt consolidation policy in the Euro Area mimicking the Fiscal Compact Rule (FCR). The rule requires the signatory states to target a debt-to-GDP ratio below 60%. Within the context of Dynamic Stochastic General Equilibrium models (DSGE), we augment a fully micro-founded New-Keynesian model with a parametric linear debt consolidation rule, and we analyse the effects on the main macroeconomic aggregates. To fully understand its implications on the economy, we study different debt consolidation scenarios, allowing the excess debt to be re-absorbed with different timings. We show that including a debt consolidation rule can exacerbate the effects of the shocks in the economy by imposing a constraint on the public debt process. Secondly, we note that the effect of loosening or tightening the rule in response to a shock is heterogeneous. Shocks hitting nominal variables (monetary policy shock) are not particularly sensitive. On the contrary, we prove that the same change has a more pronounced effect in case of shock hitting real variables (productivity and public spending shocks). Finally, we show that the macroeconomic framework worsens as a function of the rigidity of the debt consolidation rule. As a limiting case, we show that the effects on output, employment, real wages, inflation,and interest rates are sizable. "Home Sweet Home: The Effect of Sugar Protectionism on Emigration in Italy, 1876-1913"
CEIS Working Paper No. 437 CARLO CICCARELLI, University of Rome, Tor Vergata - Faculty of Economics
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ALBERTO DALMAZZO, University of Siena - Department of Economics
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DANIELA VURI, University of Rome Tor Vergata, IZA Institute of Labor Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
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Protectionist policies are often considered or even implemented as a reaction to increasing globalization. This is not new in history. This paper uses the introduction of import duties on sugar in the late nineteenth century Italy to measure the impact of protectionism on migration out flows at the time of the fi
rst globalization. Both for climate reasons and the nature of the soil, the cultivation and processing of sugar beets was geographically concentrated in a small area, leading de facto to a regional protectionist policy. Our theoretical model illustrates how a tariff that favours local producers may affect residents' incentives to migrate abroad. The predictions of the model are tested with the synthetic control method which uses the variation in sugar cultivation across areas to estimate the effect of interest. Our results show that protectionism effectively reduced the relative incentive to migrate away from sugar-producing areas. "Political Turnover and the Performance of Local Public Enterprises"
CEIS Working Paper No. 438 ANDREA DE MEO, University of Rome 'Tor Vergata'
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LORENZO FERRARI, University of Rome, Tor Vergata - Department of Economics and Finance
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We study how political party turnover at the municipal level affects the economic performance of Italian Local Public Enterprises. To this end, we match data on municipal elections in Italy to the budget data of firms whose shares are owned by Italian municipalities. As political turnover and performance are likely to be jointly endogenous, we exploit the quasi-experimental nature of close electoral races to estimate the causal treatment effect. We find evidence that municipal party turnover disrupts investment and slows down productivity growth. At the same time, the probability of observing financial distress is larger. No significant effect can be established, on the other hand, in terms of profitability and employment growth. We link the effect of municipal party turnover to three mechanisms: first, the nature of close electoral races alters the incumbent party’s incentives to invest; second, turnover makes the appointment of new, less-experienced, board directors more likely; third, the new political leadership directly reduces the amount of resources transferred in order to signal its commitment to curb wasteful municipal expenditure. We finally set up a survival analysis, whose results show that municipal party turnover is associated to an increase in the likelihood to observe bankruptcy. | | ^top
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