SCED journal

NEW in SCED 📒 𝐂𝐚𝐬𝐡 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐥𝐢𝐩𝐬 𝐜𝐮𝐫𝐯𝐞: 𝐓𝐡𝐞 𝐜𝐚𝐬𝐞 𝐨𝐟 𝐁𝐫𝐚𝐳𝐢𝐥 𝐝𝐮𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐩𝐚𝐧𝐝𝐞𝐦𝐢𝐜 Great research by: ◾️ José Angelo Divino, Ph.D. | Catholic University of Brasilia, Brazil ◾️ 𝐀𝐝𝐫𝐢𝐚𝐧𝐚 𝐆𝐨𝐦𝐞𝐬 𝐝𝐚 𝐒𝐢𝐥𝐯𝐚 | Catholic University of Brasilia and Central Bank of Brazil, Brazil Highlights: ◾️ We investigate the linear and nonlinear effects of the pandemic period on the dynamics of the Brazilian Phillips curve. ◾️ Despite the socio-economic benefits to vulnerable social groups, cash transfers to low-income families increased inflation. ◾️ The backward-looking component decreased while the forward-looking component increased, suggesting a shift in the firms’ price-setting behavior. ◾️ There was a reduction in the flatness of the Phillips curve, as the output gap coefficient more than doubled during the pandemic. ◾️ Sectorial increases in demand, decrease in aggregate supply, money supply growth, and loose monetary policy explain these findings. Keywords: ◾️ Phillips curve ◾️ Consumer inflation ◾️ Unconditional cash transfers ◾️ Monetary policy Abstract: This paper investigates the linear and nonlinear effects of the pandemic period on the dynamics of the Brazilian inflation through the estimation of a hybrid Phillips curve. Despite the undisputed socio-economic benefits, cash transfers paid by the government to low-income families increased inflation, with an estimated coefficient similar in magnitude to the output gap. The backward-looking component decreased while the forward-looking component increased sharply, suggesting a shift in the price-setting behavior toward anticipating fluctuations in the business cycle. There was also a significant reduction in the flatness of the Phillips curve, as the output gap coefficient more than doubled during this period. These findings might be explained by the unprecedented combination of sectorial increases in demand, a decrease in aggregate supply, anticipated money supply growth, and loose monetary policy. They unveil an undesired side effect of cash transfers on inflation that adversely affected the purchase power of the program beneficiaries.   Volume 71, December 2024, Pages 680-688   📒 FULL TEXT access paper here 🔽 https://lnkd.in/e3g_BStM #sced #economics #cash #Brazil #inflation #monetary

NEW @ SCED 📒 𝐓𝐡𝐞 𝐫𝐨𝐥𝐞 𝐨𝐟 𝐥𝐨𝐜𝐚𝐥 𝐢𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐚𝐥 𝐪𝐮𝐚𝐥𝐢𝐭𝐲 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐝𝐢𝐠𝐢𝐭𝐚𝐥 𝐚𝐧𝐝 𝐞𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭𝐚𝐥 𝐭𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐈𝐭𝐚𝐥𝐲 Fantastic work by: ◾️ Gianluigi De Pascale | University of Foggia, Italy ◾️ Andrea Pronti | Università Cattolica del S. Cuore, Milan, Italy & SEEDS - Sustainability Environmental Economics and Dynamic Studies, Italy ◾️ 𝐑𝐨𝐛𝐞𝐫𝐭𝐨 𝐙𝐨𝐛𝐨𝐥𝐢 | Università Cattolica del S. Cuore, Milan, Italy & SEEDS - Sustainability Environmental Economics and Dynamic Studies, Italy   Highlights: ◾️ Our findings indicate that the quality of local institutions can have an important role for the ecological transition, but not for the digital transition. ◾️ Higher levels of institutional quality increase the performance in waste management and reduce the level of local air pollution. ◾️ The estimated coefficient of institutional quality is not statistically significant neither for ultra-wide band nor for innovative start-ups. ◾️ These results confirm that the green transition is largely policy-driven while the digital transition is driven by socio-economic factors. Keywords: ◾️ Ecological transition ◾️ Digital transition ◾️ Quality of institutions ◾️ Spatial Durbin model Abstract: In this paper we analyze the effect of institutional quality on the so-called Twin transition at provincial level in Italy. To carry out the analysis, we use two proxies for the ecological transition, namely waste management and air pollution, and two proxies for the digital transition, namely ultra-wide band connections and provincial innovative start-ups. All the models are estimated on a panel of 103 provinces with a time dimension that varies for the different dependent variables. We employ Spatial Durbin Model estimator to take into account spatial dependence across provinces. Our findings indicate that the quality of local institutions may have an important role for the ecological transition, but not for the digital transition. Higher levels of institutional quality increase the performance in waste management and reduce the level of local air pollution. Conversely, the estimated coefficient of institutional quality is not statistically significant neither for ultra-wide band nor for innovative start-ups. Institutional quality turns to be significant but negative for the digital transition when dummy variable controlling for the presence of science-oriented university is added in the model specification......   Volume 71, December 2024, Pages 689-705   📒 OPEN access paper here 🔽 https://lnkd.in/eFesghT5 #sced #economics #environmental

OUT in SCED 📒 𝐓𝐡𝐞 𝐩𝐚𝐫𝐚𝐝𝐨𝐱 𝐨𝐟 𝐝𝐞𝐛𝐭 𝐚𝐧𝐝 𝐌𝐢𝐧𝐬𝐤𝐲 𝐜𝐲𝐜𝐥𝐞: 𝐍𝐨𝐧𝐥𝐢𝐧𝐞𝐚𝐫 𝐞𝐟𝐟𝐞𝐜𝐭𝐬 𝐨𝐟 𝐝𝐞𝐛𝐭 𝐚𝐧𝐝 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐚𝐧𝐝 𝐯𝐚𝐫𝐢𝐞𝐭𝐲 𝐨𝐟 𝐜𝐚𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐦   Fantastic research by: ◾️ 𝐘𝐮𝐤𝐢 𝐓𝐚𝐝𝐚 | The New School for Social Research, New York, United States   Highlights: ◾️ This study shows the importance of non-financial corporates’ retention rate in both short-run debt-led and debt-burdened conditions and how it influences the dynamics of the long-run debt cycle. ◾️ In the debt-led demand regime, the driver of the cycle is the return on dividends, leading to a higher share price and consumption out of wealth. In addition, debt-led growth without investment raises questions about the sustainability of such capitalism. ◾️ The stagnation in the debt-burdened demand regime can be transformed into a stable cyclical growth when the autonomous investment level is sufficiently high. ◾️ The paradox of the debt cycle conditioned with sufficiently high animal spirits is a long-wage growth cycle affected by changes in institutional behavior, such as corporate governance and nonfinancial firms’ animal spirits. Keywords: ◾️ Minsky ◾️ Paradox of debt ◾️ Capitalism ◾️ Growth ◾️ Financial instability ◾️ Supercycle Abstract: To study the variety of financialized capitalism contingent on firms’ institutional behavior, we model the US type of shareholder-oriented capitalism with the Minskyan cycle and the Japanese type of partially fledged financialized capitalism with high firm retention rates using the paradox of debt (Steindl) cycle. The results show: 1) instability could arise when firms have a high retention rate of profit to deleverage; 2) the debt-led and the debt-burdened demand regimes can be distinguished by setting sufficiently low retention rates for the former and that of high rates for the latter; 3) the level of retention rate is important in determining the short-run condition but also sets the condition of the long-run Minsky or Steindl debt cycle while we observe secular stagnation in the accumulation rate; 4) the debt-burdened demand transforms into a long-wave cyclical growth with sufficiently high firms' animal spirits, which exhibits the possibility of demand-led cyclical growth.   Volume 71, December 2024, Pages 706-729   📒 FULL TEXT access paper here 🔽 https://lnkd.in/gUdek86Z #sced #economics #growth #capitalism #Minsky

OUT in SCED 📒 𝐕𝐚𝐫𝐢𝐞𝐭𝐢𝐞𝐬 𝐨𝐟 𝐦𝐢𝐝𝐝𝐥𝐞-𝐢𝐧𝐜𝐨𝐦𝐞 𝐭𝐫𝐚𝐩: 𝐇𝐞𝐭𝐞𝐫𝐨𝐠𝐞𝐧𝐞𝐨𝐮𝐬 𝐭𝐫𝐚𝐣𝐞𝐜𝐭𝐨𝐫𝐢𝐞𝐬 𝐚𝐧𝐝 𝐜𝐨𝐦𝐦𝐨𝐧 𝐝𝐞𝐭𝐞𝐫𝐦𝐢𝐧𝐚𝐧𝐭𝐬 Great research by: 𝐂𝐚𝐫𝐥𝐨𝐬 𝐁𝐢𝐚𝐧𝐜𝐡𝐢, 𝐅𝐞𝐫𝐧𝐚𝐧𝐝𝐨 𝐈𝐬𝐚𝐛𝐞𝐥𝐥𝐚, 𝐀𝐧𝐚𝐜𝐥𝐚𝐫𝐚 𝐌𝐚𝐫𝐭𝐢𝐧𝐢𝐬, and Santiago Picasso @ Institute of Economics, University of the Republic, Montevideo (Uruguay)   Highlights: ◾️ We identify interactive effects of supply and demand factors determining MIT: higher levels of productive complexity moderate the external demand constraint. ◾️ While slowdowns growth within middle-income thresholds is a regular pattern in modern economy, different MIT trajectories can be tracked. ◾️ Using economic complexity indicators three MIT varieties are identified. ◾️ Countries that have reached medium complexity levels require deep structural changes to escape MIT. ◾️ MIT countries seem to follow a sort of hysteresis-affected trajectory in which national efforts to break it have resulted in erratic detours. Keywords: ◾️ Middle-income trap ◾️ Structural change ◾️ External restriction ◾️ Economic complexity Abstract: This work provides new evidence on the structural change processes undertaken by countries trapped in the middle-income trap (MIT) by applying a comprehensive approach, from both the supply and the demand sides. First, it provides evidence that there is a regular trapping mechanism, determined by the interaction between external demand constraints and the level of complexity of the economies. External constraint operates since MIT countries depend on exogenous prices to grow. Meanwhile, that constraint relaxes as the complexity of production increases. Second, it presents a novel identification of the MIT countries trajectories using indicators of economic complexity. A typology of the varieties of MIT is built according to the level of complexity of national economies and the relatedness between their current productive structure and more complex goods. It shows that having reached certain levels, further increases in supply complexity require a deepening of structural change through unrelated diversification.   Volume 71, December 2024, Pages 320-336   📒 FULL TEXT access paper here 🔽 https://lnkd.in/e66frxgy #sced #economics #income

NEW in SCED 📒 𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 𝐬𝐨𝐜𝐢𝐨𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐫𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐝𝐞𝐦𝐨𝐠𝐫𝐚𝐩𝐡𝐢𝐜 𝐭𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧: 𝐈𝐧𝐭𝐫𝐨𝐝𝐮𝐜𝐢𝐧𝐠 𝐭𝐡𝐞 𝐒𝐞𝐧𝐢𝐨𝐫 𝐄𝐜𝐨𝐧𝐨𝐦𝐲 𝐓𝐫𝐚𝐜𝐤𝐞𝐫 Great work by: ◾️ David Roch Dupré | Universidad Pontificia Comillas (Spain) ◾️ Elisa ARACIL | Universidad Pontificia Comillas (Spain) ◾️ Pablo Calvo Báscones | Universidad Pontificia Comillas (Spain) Highlights ◾️ We offer a framework for the socioeconomic implications of aging populations. ◾️ We introduce a composite indicator: the Senior Economy Tracker (SET). ◾️ The SET assesses inter/intra-regional readiness in adapting to aging populations. ◾️ The SET guides policymaking and raises awareness of this demographic challenge. Keywords ◾️ Aging ◾️ Demographic transition ◾️ Composite indicators ◾️ Senior ◾️ Older adults Abstract Aging constitutes the dominant demographic challenge globally. The demographic transition entails a paradigm shift in the economic model to accommodate economic structures to life-expectancy gains. The socioeconomic implications from this transition remain largely undefined conceptually from an integrated perspective and unrecognized in official statistics. This study introduces a multidimensional and multi-actor reference framework, and a composite indicator, the Senior Economy Tracker (SET), to measure national readiness and progress in adapting to the demographic transition, over time and across countries. We apply our indicator to 27 European countries in 2010-2021. Our study reveals crucial differences in pathways and stages of maturity in addressing the socioeconomic impacts of aging. The proposed indicator aims to guide action to adapt economic structures to longer life spans, assist organizational and individual decision making, facilitate the development of effective policy interventions and raise awareness of the demographic transition.   Volume 71, December 2024, Pages 430-443   📒 OPEN TEXT access paper here 🔽 https://lnkd.in/esjEy4wG #sced #economics

NEW in SCED 📒 𝐖𝐡𝐚𝐭 𝐝𝐫𝐢𝐯𝐞𝐬 𝐭𝐡𝐞 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐩𝐚𝐲𝐨𝐟𝐟𝐬 𝐨𝐟 𝐮𝐬𝐢𝐧𝐠 𝐠𝐞𝐧𝐞𝐫𝐚𝐭𝐢𝐯𝐞 𝐚𝐫𝐭𝐢𝐟𝐢𝐜𝐢𝐚𝐥 𝐢𝐧𝐭𝐞𝐥𝐥𝐢𝐠𝐞𝐧𝐜𝐞?   Interesting work by: ◾️ Jacques Bughin | Solvay Brussels School of Economics and Management, Free University of Brussels, Belgium   Highlights: ◾️ We are extending recent case study-based analyses to an econometric analysis of the labor productivity gains associated with Generative AI (GenAI) in content production, coding, customer acquisition, marketing and sales, and customer service. ◾️ As productivity distribution is skewed with a long tail of high gains, we test for a "superstar" effect using a maximum entropy test. ◾️ We then examine how productivity gains is associated with 'AI capability' whereby a firm is able orchestrate a set of critical complementary AI resources, such as data lakes to support Large Language Model performance, as well as access to high-quality data and machine learning skills. ◾️ Entropy test does not provide evidence of a superstar effect; rather GenAI productivity is closely linked to AI capabilities. Abstract: Artificial Intelligence, a set of technologies that aim to replicate human cognitive functions, has seen remarkable improvements over the last decade. In particular, generative AI (GenAI), a subset of AI able to generate content tasks based on Large Language Models (LLM), has recently gained momentum. Based on an extensive analysis of generative AI use cases in large enterprises, we find that Gen AI shows strong labor productivity improvements across metrics such as throughput time, unit cost, and task effectiveness. However, the distribution of gains is asymmetric in favor of a few companies. While the current distribution of gains does not provide evidence of a power law effect, the current asymmetry reflects differences in AI resources/capabilities across companies - mainly data access, AI talent, or AI governance.   Volume 71, December 2024, Pages 658-668   📒 Read more here 🔽 https://lnkd.in/eZttfTwv #sced #economics #ai #labor

NEW in SCED 📒 𝐏𝐫𝐢𝐜𝐞𝐬, 𝐦𝐚𝐫𝐤𝐮𝐩𝐬 𝐚𝐧𝐝 𝐰𝐚𝐠𝐞𝐬: 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐝𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐯𝐞 𝐜𝐨𝐧𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞𝐬 𝐢𝐧 𝐒𝐩𝐚𝐢𝐧, 2021-2023   IN PRESS, already ONLINE   Great research by: ◾️ 𝐉𝐨𝐫𝐠𝐞 𝐔𝐱ó | Universidad Complutense de Madrid (Spain) ◾️ eladio febrero | Universidad de Castilla-La Mancha (Spain) ◾️ 𝐈𝐠𝐧𝐚𝐜𝐢𝐨 Á𝐥𝐯𝐚𝐫𝐞𝐳 | Universidad Autónoma de Madrid (Spain) Highlights ◾️ Using the Observatory of Firms’ Margins, we confirm an increase in aggregate markups in Spain during the recent inflationary episode. ◾️ The main factor explaining price increases is firms' pass-through of higher input costs to protect their profits. The direct effect of markup increases has been quantitatively less important, and that of unit labour costs negligible. ◾️ Inflation has had huge distributional consequences and there is space for non-inflationary wage increases. ◾️ While fiscal and regulatory measures have effectively curbed the inflation rate having an expansive effect, restrictive monetary policy is inappropriate and costly. Keywords ◾️ Sellers’ inflation ◾️ markups ◾️ functional distribution ◾️ counter-inflationary economic policy ◾️ Spain Abstract This article analyses the recent inflationary experience in Spain (2021-2023), focusing on the functional income distribution, the evolution of markups and real wages, and the economic policies implemented. We rely on the conflict theory of inflation and touch upon recent debates on of sellers' inflation. Using the Observatory of Firms’ Margins, we confirm an increase in aggregate markups. Nevertheless, the main factor explaining price increases is firms' pass-through of higher input costs to protect their profits. The direct effect of markup increases has been quantitatively less important, and that of unit labour costs negligible. Therefore, inflation has had huge distributional consequences and there is space for non-inflationary wage increases. While fiscal and regulatory measures have effectively curbed the inflation rate having an expansive effect, restrictive monetary policy is inappropriate and costly.   📒 OPEN access paper 🔽 https://lnkd.in/gzY9hY2B #sced #economics

JUST OUT in SCED 📒 𝐖𝐡𝐲 𝐚𝐫𝐞 𝐰𝐨𝐫𝐤𝐞𝐫𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐒𝐩𝐚𝐧𝐢𝐬𝐡 𝐞𝐧𝐞𝐫𝐠𝐲 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐦𝐨𝐫𝐞 𝐥𝐢𝐤𝐞𝐥𝐲 𝐭𝐨 𝐞𝐚𝐫𝐧 𝐡𝐢𝐠𝐡𝐞𝐫 𝐰𝐚𝐠𝐞𝐬 𝐭𝐡𝐚𝐧 𝐨𝐭𝐡𝐞𝐫 𝐒𝐩𝐚𝐧𝐢𝐬𝐡 𝐰𝐨𝐫𝐤𝐞𝐫𝐬? - 𝐖𝐚𝐠𝐞𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐒𝐩𝐚𝐧𝐢𝐬𝐡 𝐞𝐧𝐞𝐫𝐠𝐲 𝐬𝐞𝐜𝐭𝐨𝐫   Interesting research by: ◾️ 𝐀𝐥𝐞𝐣𝐚𝐧𝐝𝐫𝐨 𝐆𝐚𝐫𝐜í𝐚-𝐏𝐨𝐳𝐨 | University of Malaga (Spain) ◾️ 𝐄𝐥𝐞𝐧𝐚 𝐋𝐚𝐬𝐬𝐨-𝐃𝐞𝐥𝐚-𝐕𝐞𝐠𝐚 | University of Malaga (Spain) ◾️ Eva Isabel González Guerrero | University of Malaga (Spain) Highlights: ◾️ This sector has a consolidated workforce and the workers' educational levels are appropriate for their jobs. ◾️ There are no gender-based wage differences observed in Spanish energy industry. ◾️ In Spanish energy industry, working conditions and wages are established through collective bargaining agreements at the company level, which stands in contrast to other types of agreements established in the rest of the Spanish economy. Keywords: ◾️ Energy ◾️ Wages ◾️ Collective bargaining agreements ◾️ Spain ◾️ Binomial discrete choice model Abstract: In Spain, 85.5 % of energy industry workers have a salary that is more than the Spanish average salary. We apply a binomial logit model based on the maximum likelihood estimation method to analyze the factors that determine the probability of obtaining these higher wages. The sample used was taken from the Wage Structure Survey (2018) prepared by the Spanish National Institute of Statistics. Firstly, the results show that this sector has a consolidated workforce and that the workers' educational levels are appropriate for their jobs. Secondly, there are no gender-based wage differences in this industry. Finally, working conditions and wages are established through collective bargaining agreements at the company level, which stands in contrast to other types of agreements established in the rest of the Spanish economy.   Volume 71, December 2024, Pages 609-616   📒 FULL TEXT access paper here 🔽 https://lnkd.in/eYv2e6vv #sced #economics #energy #Spain #wages | Universidad de Málaga

NEW @ SCED 📒 𝐃𝐲𝐧𝐚𝐦𝐢𝐜 𝐝𝐞𝐭𝐞𝐫𝐦𝐢𝐧𝐚𝐧𝐭𝐬 𝐨𝐟 𝐨𝐩𝐭𝐢𝐦𝐚𝐥 𝐠𝐥𝐨𝐛𝐚𝐥 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐩𝐨𝐥𝐢𝐜𝐲 Great research by: ◾️ Michael Grubb | University College London - UCL (UK) ◾️ Rutger-Jan Lange | Erasmus University Rotterdam (The Netherlands) ◾️ 𝐍𝐢𝐜𝐨𝐥𝐚𝐬 𝐂𝐞𝐫𝐤𝐞𝐳 | University of Oxford (UK) ◾️ Ida Sognnæs | Center for International Climate Research (Norway) ◾️ Claudia Wieners | University of Utrecht (The Netherlands) ◾️ Pablo Salas | International Finance Corporation (USA) & University of Cambridge (UK)   Highlights: ◾️ CO2-emitting energy and related systems involve inertia and induced innovation. ◾️ Most standard cost-benefit assessment models neglect these dynamic characteristics. ◾️ We construct a stylized, analytically-tractable model to show their impact on policy. ◾️ These dynamic characteristics may double or more the optimal initial expenditure. ◾️ This, and risk aversion, imply higher carbon prices combined with additional policies. Keywords: ◾️ Climate Change ◾️ Optimal abatement ◾️ Induced innovation ◾️ Path dependence ◾️ Global cost-benefit Abstract: We explore the impact of dynamic characteristics of greenhouse-gas emitting systems, such as inertia, induced innovation, and path-dependency, on optimal responses to climate change. Our compact and analytically tractable model, applied with stylized damage assumptions to derive optimal pathways, highlights how simple dynamic parameters affect responses including the optimal current effort and the cost of delay. The conventional cost-benefit result (i.e., an optimal policy with rising marginal costs that reflects discounted climate damages) arises only as a special case in which the dynamic characteristics of emitting systems are assumed to be insignificant. Our analysis highlights and distinguishes from the (often implicit) assumption in many cost-benefit models, which neglect inertia and assume exogenous technology progress. This tends to defer action. More generally, our model yields useful policy insights for the transition to deep decarbonization, showing that enhanced early action may greatly reduce both damages and abatement costs in the long run.   Volume 71, December 2024, Pages 490-508   📒 OPEN TEXT access paper here 🔽 https://lnkd.in/ePVhJ_Jn #sced #economics #climate #energy

NEW in SCED 📒 𝐅𝐢𝐬𝐜𝐚𝐥 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐢𝐞𝐫𝐬 𝐢𝐧 𝐫𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧 𝐚𝐧𝐝 𝐞𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧. 𝐀𝐧 𝐚𝐧𝐚𝐥𝐲𝐬𝐢𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐈𝐭𝐚𝐥𝐢𝐚𝐧 𝐫𝐞𝐠𝐢𝐨𝐧𝐬   Fantastic work by: ◾️ Gianluigi Coppola | University of Salerno (Italy) ◾️ Sergio Destefanis | University of Salerno (Italy) ◾️ Mario Di Serio | University of Salerno (Italy) ◾️ Matteo Fragetta | University of Salerno (Italy)   Highlights: ◾️ We estimate government consumption and investment multipliers for 20 Italian regions. ◾️ We provide region-specific multipliers using Bayesian heterogeneous threshold PVAR. ◾️ We find considerable multiplier heterogeneity across regions and cycle states. ◾️ We conduct an analysis on a set of potential multipliers' determinants. Keywords: ◾️ Fiscal shocks ◾️ Regional multipliers ◾️ Asymmetric effects ◾️ Government spending categories ◾️ Bayesian heterogeneous panel threshold VAR Abstract: This paper estimates the multipliers of two types of government spending in the 20 Italian administrative regions throughout 1960–2017, distinguishing between phases of expansion and recession. We derive regime- and region-specific multipliers through a nonlinear Bayesian heterogeneous panel threshold VAR model and provide a wide-ranging sensitivity analysis. We find that both government consumption and government investment multipliers are higher in recession than in expansion. In almost every region, government investment multipliers exceed unity in recession phases and are generally higher than their government consumption counterparts regardless of the business cycle. An exploratory analysis of the region-specific multipliers suggests that the difference between the region-specific multipliers in recession and expansion is positively associated with structural labour slack and negatively associated with trade openness. Factors related to the quality of local institutions, such as corruption and the relative size of the informal economy, also have a negative impact.   Volume 71, December 2024, Pages 538-556   📒 OPEN TEXT access paper here 🔽 https://lnkd.in/eYfRQW9W Università degli Studi di Salerno | #sced | #economic #fiscal