RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2007 - 2

In an intertemporal Arrow-Debreu economy with a continuum of agents, suppose that the auctioneer sets prices while the government institutes optimal lump-sum transfers period by period. An earlier paper showed how subgame imperfections arise because agents understand how their current decisions such as those determining investment will influence future lump-sum transfers. This observation undermines the second efficiency theorem of welfare economics and makes «history» a widespread externality. A two-period model is used to investigate the constrained efficiency properties of different kinds of equilibrium. Possibilities for remedial policy are also discussed.

In this paper we broaden the standard debt sustainability framework used in the IMF-WB Heavily Indebted Poor Countries (HIPC) Initiative to include the analysis of domestic public debt and other feedback effects into the usual debt sustainability analysis (DSA). The latter does not take into account the fully-fledged government budget constraint and the feedback effects of the fiscal and monetary adjustment required by multilateral programs. This work focuses on the evaluation of total public debt sustainability in a simple accounting framework that includes exchange rate effects. We use new data on domestic public debt and show how the switch from foreign to domestic borrowing, and rising domestic real interest rates are likely to undermine the overall sustainability and the success of debt relief programs.

This work investigates the statistical properties of aggregate output growth rates in the U.S. and Italy. We show that in both countries growth rates follow an exponential-power density, with tails that are fatter than a normal distribution. Furthermore, fat tails appear to be robust with respect to: (i) the output measure employed in the analysis; (ii) the presence of outliers, autocorrelation and heteroscedasticity; (iii) the family of theoretical density employed in the analysis. Finally, we discuss the implications of our findings for economics and econometrics.

This article provides a multi-dimensional index for evaluating well-being in the EU. It begins with an overview of an analytical approach that goes beyond utilitarianism: Dasgupta’s quality of life framework, which is defined according to the goals of EU policies and based on a set of indicators that are both constituents and determinants of well-being. This framework is then used to draw up an index, based on a Borda ranking, of the EU member countries in terms of their economic and social well-being. This is followed by discussion of the correlation between the ranking and the indicators selected.

In this paper we estimate the demand for alcoholic beverages in Italy following the rational addiction framework by Becker and Murphy (1988) and using a GMM estimator. To increase confidence in the reliability of this framework we use two different data sets: (i) a time series of annual aggregate alcohol consumption from 1960 to 2002 supplied by ISTAT; (ii) a time series of household data on wine, beer and liquor consumption recorded on a four-week basis from 1999:3 to 2004:4 and supplied by ISMEA-Nielsen. Both data sets support the hypothesis that alcohol consumers are actually forward-looking. Past consumption is significant in explaining current consumption thus detecting the addictive nature of alcohol. Short and long run price elasticities and the income elasticity of demand are also calculated. Interestingly, the long run income elasticity of demand, as derived from the rational addiction model, is higher than one both for aggregate and specific products so alcoholic beverages turn out to be luxury goods.