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Reciprocal trade agreements in gravity models: a meta-analysis
No full textOver the time a large number of reciprocal preferential trade agreements (RTAs) have been
concluded among countries. Recently many studies have used gravity equations in order to estimate
the effect of RTAs on trade flows between partners. These studies report very different estimates, since
they differ greatly in data sets, sample sizes, and independent variables used in the analysis. So, what is
the true impact of RTAs? This paper combines, explains, and summarizes a large number of results
(1460 estimates included in 75 papers), using a meta-analysis (MA) approach. Notwithstanding quite
an high variability, studies consistently find a positive RTAs impact on bilateral trade: the hypothesis
that there is no effect of trade agreements on trade is easily and robustly rejected at standard
significance levels. We provide pooled estimates, obtained from fixed and random effects models, of
the increase in bilateral trade due to RTAs. Finally, information collected on each estimate allows us to
test the sensitivity of the results to alternative specifications and differences in the control variables
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A Panel-CADF Test for Unit Roots
Get PDFIn this paper we propose the extension of the covariate-augmented
Dickey Fuller (CADF) test for unit roots developed by
Hansen (1995} to the panel case. We show that the extension is
viable and gives power gains with respect to the time series
approach. Particular attention is paid to cross-unit [email protected]@[email protected]
EU Trade Policies: Benchmarking Protection in a General Equilibrium Framework
Get PDFThis paper deals with the EU s trade policy with two objectives: on the one hand, we study
the performance of EU's preferential agreements in granting their partners improved market
access; on the other hand, we assess the extent to which domestic sectors are effectively
protected. As far as the first objective is concerned, we construct bilateral indicators of
protection based on the applied tariffs faced by each exporter. In order to do this, an index of
trade policy restrictiveness is computed, using the Mercantilistic Trade Restrictiveness Index
as the tariff aggregator. We also analyze the protection granted to each sector by the existing
tariff structure. In this respect, we compute effective rates of protection that overcome the
well-known theoretical shortcomings of the traditional definition (Output Effective Rate of
Protection). The analysis is based on a comparative static applied general equilibrium model (Global
Trade Analysis Project) and on the most recent version (release 6) of the related database.
Results are obtained with reference to the situation existing in 2001, but the assessment of
protection is carried out for the enlarged EU. Overall, it appears that notwithstanding the
rhetoric about preferential access, several developing countries are the ones facing the highest
hurdles in getting into the EU markets. Both bilateral protection and effective protection rates
are broadly consistent with the evolution of the WTO negotiations: the strongest demands
from developing countries in terms of market access in the EU have less to do with the overall
applied MFN tariffs on industrial products than the reduction of distortions affecting trade in
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Choosing Between Fixed and Adjustable Rate Mortgages
Get PDFThis paper estimates the determinants of households choice between fixed rate (FRM) and
adjustable rate mortgage (ARM) contracts, using the Bank of Italy s Survey of Household
Income and Wealth. Contrary to the predictions of the theoretical literature, the analysis
shows that most household characteristics proxying for exposure to other (non-mortgagerelated)
risks and for individual risk aversion are irrelevant for the choice. This, in turn,
crucially depends on the relative price of the mortgages and on whether the household is
liquidity constrained. Liquidity constrained households find ARMs particularly attractive
because their initial payments are generally lowest, ceteris paribus. This is so despite some
evidence that the premium that lenders charge over their cost of funds is substantially higher
on ARMs than on FRMs. Taken together, the evidence suggests that ARM holders do not
fully take into account the risk of a rise of the reference interest rates. On the other hand,
lenders price quite expensively this risk and borrowers end up paying a high price for the
benefit of low initial [email protected]
Technology shocks, structural breaks and the effects on the business cycle.
Get PDFThis paper contributes to the literature on the role of technology shocks as
source of the business cycle in two ways. First, we document that time-series of
US productivity and hours are apparently affected by a structural break in the late
60 s, which is likely due to a major change in the monetary policy. Second, we show
that the importance of demand shocks over the business cycle has sharply increased
after the [email protected]@[email protected]
The influence of private label on purchase behaviour in relation to organic foods
No full textThe paper investigates the influence of ‘private labels’ on purchase behaviour regarding organic foods through the attitudes of Italian customers of large scale retailing. To this end, a survey of a sample of 1,000 representative Italian family units - gathered by means of electronic questionnaires - was carried out. The data was analyzed using descriptive analysis and multivariate data analysis, such as Multiple Correspondence Analysis (MCA). From a sub-sample of 287 family units which were selected according to ‘private label’ purchasing habits, the complex space of the variables underlying the observed phenomenon was reduced through MCA in two main factors (‘Loyalty to large retailers’ and ‘Involvement with organic products’) that explain the greater part of the inertia of the data. A cluster analysis was subsequently applied, finding five profiles of ‘private label’ organic food consumers: ‘loyal’, ‘interested’, ‘not interested’, ‘indifferent’, and ‘willing to be convinced’.Il paper costituisce uno degli otto saggi conclusivi del sottoprogetto “consumatore” realizzato nell'ambito del Progetto di Ricerca di Interesse Nazionale (PRIN2003) “Sviluppo rurale, distribuzione moderna, sicurezza alimentare: le prospettive dell’agricoltura biologica in Italia“
Cross-Border M&As in the Financial Sector. Is Banking Different from Insurance?
No full textThis paper investigates what factors might help explain the internationalization strategy of banks and
insurance companies, by comparing the determinants of cross-border M&As in the two sectors in a
unified framework. The empirical analysis shows that between 1990 and 2003 the internationalization
of banks and insurance companies followed similar patterns. Distance and economic and cultural
integration are important determinants for both the banks and the insurance companies expansion
abroad. Comparative advantage also has a prominent role, the more so for banks. The evidence is less
supportive of the view that cross-border M&As are more frequent between similar countries, as
predicted by the new trade theory. Finally, and most interestingly, we find indirect evidence consistent
with the hypothesis that implicit barriers to foreign entry are more important in explaining the
behavior of banks than that of insurance [email protected]@ania.i
The indirect effects of manufacturing internationalization on logistics - Evidence from the Italian districts
No full textThe aim of the paper is to investigate the indirect impact of internationalisation process, undertaken by
the district firms located in Veneto region (north-eastern Italy), on the logistics employment change
within the same industrial districts. The results of the empirical analysis have showed that within the districts there is not a clear positive
relationship between internationalisation and the employment growth in the logistics sector. This might
be due, either to a strong insourcing of logistics activities by district firms, or to a trend of outsourcing
such activities to logistics suppliers located outside the industrial districts.
The paper is organised into five sections. An introduction is followed by a literary review on the direct
and indirect effects of manufacturing internationalisation on the home country, with a specific focus on
logistics. The sample and the methodology are described in section three, section four presents the
empirical results. Conclusions and further research questions [email protected]@[email protected]
Wealth Accumulation and Growth in a Specific-Factors Model of Trade and Finance.
No full textThis paper investigates the allocative properties of an OLG specificfactors
small open economy facing perfect capital mobility. Wealth formation,
economic development and different labor market regimes are
at the center-stage of the analysis. In a model with competitive wages
and no unemployment, we find that exogenous shocks that do not affect
human wealth like the terms of trade and land endowment shifts
or the propensity to save, leave nonhuman wealth, consumption and
aggregate labor unchanged; in such cases, capital formation is driven
by the static effects exerted on sectoral labor. Disturbances that alter
human wealth like the world interest rate, and capital and labor
taxation shocks or the thrift rate, instead, affect nonhuman wealth
and consumption as they involve an intergenerational redistribution of
resources that modifies aggregate saving; labor hours supplied may be
changed. In these circumstances, capital accumulation is the result of
the consequences exerted on financial wealth and input demands. The
consideration of a labor market with structural unemployment does
not qualitatively affect the results, except for the world interest rate
and the rate of time discount shifts. Our results differ substantially
from those obtained in static and dynamic specific-factors setups with
financial [email protected]
Measuring the Sources of Cyclical Fluctuations in the G7 Economies.
No full textWe analyze herein the importance of four types of shocks in contributing to the business cycles of the G7 economies. After disentangling the common permanent and transitory shocks in the G7 outputs, we identify the domestic and foreign components of such shocks for each country. This provides us with quite a flexible palette for understanding the degree of openness of the G7 countries, useful information for the analysis of the strengths and weaknesses of each national economy. Our empirical analysis reveals that the cycles of most of the G7 outputs are dominated by their domestic components and that the foreign components are almost entirely due to permanent [email protected]