Academic Papers and other scientific contributions

Abstract

This study investigates the dynamics of healthcare mobility in Italy, where citizens have the freedom to access medical treatment across regions. More than half a million patients, primarily from the Southern regions, engage in healthcare mobility, resulting in a total inter-regional transfer of resources amounting to about €3.7 billion in 2019. Leveraging a unique dataset spanning from 2002 to 2019, this research examines financial flows among regions using a network analysis, and identifies the factors influencing monetary flows through a gravity model. Socioeconomic disparities and the availability of specialized services in some regions are the key drivers. Regions with higher healthcare quality and the presence of private licensed hospitals attract more funds. This study offers valuable insights into the intricacies of interregional monetary flows, and finds further evidence of the persistent Italian territorial dualism, which can inform healthcare policy and promote regional equity considerations.

Abstract

The revisions implemented twice a year by the European Commission significantly change not only the forecasts but also the past values of the output gap. Consequently, many possible time series exist. Based on a new approach for estimating a real-time definition of the business cycle, we develop a comparative framework between ex-post and real-time variables using dynamic panel data models with FE, GLS and AB estimators. The real-time version of the output gap solves the important endogeneity issue between the budget balance and the output gap. Considering the period from 1995 to 2021 and the 19 Eurozone countries, our analysis deepens the cyclical nature of fiscal policy, pointing to robust procyclicality. Regardless of the specification, fiscal policy was found to be procyclical, but real-time and ex-post estimates have shown some interesting discrepancies (i.e., on a real-time basis, discretionary budgetary decisions have never been significantly expansionary, and the likely positive effects of automatic stabilisers during economic downturns have been weakened by spending reductions and/or revenue increases). Our findings may help the future reform of the Stability and Growth Pact.

Abstract

When using discretionary fiscal policies in the countries belonging to the European Union, any change affecting the current fiscal stance must run into the boundary designed by fiscal rules. This would imply that discretionary fiscal policies - being mainly driven by the need to comply with fiscal rules - might be scarcely affected by politics and the political characteristics of a country. We empirically test this hypothesis on a sample of 19 European countries observed over years 1995–2019. Using different econometric techniques and alternative specifications, we find a strong and robust fiscal pro-cyclicality. More importantly, the pro-cyclicality of the fiscal policy is not significantly affected neither by the behaviour of macroeconomic fundamentals nor by institutional and political variables. From a policy viewpoint, it seems that the mechanisms introduced to guarantee fiscal sustainability in the euro area can overcome all possible political influences on both the size and the sign of implementable fiscal policies. This would suggest that politics does not matter to shape the public budget, at least not so much as the fiscal rules.

Abstract

The aim of this work is to investigate the different implications in terms of political stability that a high oil dependency has in both oil-exporting and oil-importing countries. We employ network analysis to understand which countries are most connected in the global crude oil trade, and central in the intermediation of the flows. Then, we use this information to estimate the effects of oil dependency on political stability on a panel of 155 countries over the period 1995–2019, by means of a simultaneous-quantile regression model. Our findings corroborate the resource curse hypothesis in relation to oil-exporting countries, especially linking this outcome to the emergence of rent-seeking behaviours. Interestingly, we find that a different type of resource curse hypothesis – related to the indirect endowment of oil resources – also affects intermediary countries. As for oil importers, we find that countries that are heavily dependent on oil as the main energy source are largely exposed to geopolitical turmoil and risk to import political instability together with oil.

Abstract

Oil constitutes more than one third of total energy available in the European Union (EU), which continues to depend heavily on fossil fuels. Russian exports have known a remarkable growth in the last two decades, making this country crucial – as the war in Ukraine has recently shown – in deciding the energy future of the EU. In this regard, we provide a comprehensive and dynamic measure of oil dependency, constructing the Multi-dimensional Oil Dependency Index (MODI) for EU-28 countries (including the United Kingdom) during the period 1999–2019. This composite index considers four different key dimensions of oil dependency, i.e. energetic, economic, international and geopolitical dependencies, exploiting the multivariate technique of the Principal Component Analysis. The subsequent determination of rankings and their variation over time can be useful for policymakers to identify key areas where to intervene and reduce dependency, as well as to set benchmarks for policy actions. Our analysis reveals some interesting findings: first, the EU has still much to do to decouple oil consumption from GDP growth and achieve the environmental targets set by the European Green Deal; second, EU countries present very different degrees of oil dependency and, in several aspects, trends are not aligned; third, international and geopolitical dependency on oil constitute a worrisome problem for EU's energy security.

Abstract

This paper proposes an assessment of the association between income and unmet health needs in 29 European countries included in the European Health Interview Survey (EHIS) in 2015. Income-related inequalities for four categories of unmet needs are estimated by the Erreygers Index (EI). Unmet needs are organised into two categories: on the one side, unmet needs directly associated with households’ budget constraints; on the other side, unmet needs not directly associated with budget constraints, as waiting lists and transportation problems. Results show that all categories of unmet needs fall on lower-income people for most European systems. Furthermore, when analysing the determinants of unmet needs, those directly associated with budget constraints are led by the economic drivers, while income-related unmet needs due to long waiting lists and distance or transportation problems are more related to institutional factors such as the low quality of government.

Abstract

This paper investigates the association between income and the habit of smoking in 30 European countries. Using the European Health Interview Survey carried out between 2013 and 2015, the analysis focuses on the relationship among net monthly equivalised income of the household, the type of smoking behaviour, and the daily average number of cigarettes smoked. Income-related inequalities are estimated using the Erreygers Index. Results show that smoking is a habit which is mainly rooted in the lowest part of the income distribution both at individual and country level, regardless of the average level of per capita income. Considering that tobacco use worsens poverty conditions by diverting household spending from basic needs to tobacco itself, our results give support to a tax increase in order to discourage its use and to the implementation of educational and prevention programs aimed at helping people to quit smoking.

Abstract

By analysing the relationship between a new experimental daily index based on Twitter data (the Istat’s Social Mood on Economy Index—SMoEI) and the structure of Italian (and Spanish) sovereign interest rates, our work sheds new light on the great significance of the interconnections between economic sentiment and the Italian sovereign bond market. A placebo test performed on Spain introduces a possible extension of this linkage to the European market, highlighting the deep integration of financial markets within the European Monetary Union. Within a VAR and VECM framework with daily frequency data (2016–2022), we show that public shaping mechanisms play a role in the cost of debt financing. Our analysis emphasises the importance of economic sentiment when it comes to financial markets, putting the role of macroeconomic fundamentals in a different light. This result should be interpreted with caution, as updates to fundamentals can be affected by a time lag. In any case, recognising the importance of this index has at least two implications: on the one side, the SMoEI could represent a more responsive indicator for predicting investor sentiment; on the other side, media channels—as well as the European and national institutions—should gain relevance for their potential impact on collective sentiment, encouraging the importance of economic education and non-alarmist communication.

Abstract

The economic literature presents a large heterogeneity of results concerning the impact of fiscal variables on interest rates. Focusing on the Italian economy and considering the nature of our interest rate determinants (public finance variables and nominal GDP growth), we decided to undertake a cointegration analysis relying on the Autoregressive Distributed Lag (ARDL) bound test approach, a particularly suitable procedure within this framework that is able to disentangle short-run and long-run dynamics. Our results are quite controversial, shedding new light on the role of gross debt and primary balance as a share of GDP in relation to the long-term Italian nominal interest rate. In this context, the ECB has probably played a crucial role, especially in the most severe phases of the Sovereign debt crisis. The European fiscal framework then shows further critical issues in relation to the new role that fiscal variables play in our econometric analysis.

Abstract

Since the Maastricht Treaty, increasingly complex fiscal rules have been progressively introduced aimed at closely regulating and deeply affecting the budgetary policies of all signatory countries. One of the main reforms, enacted since 2005, has been to interpret national budget balances in structural terms, forcing each member state to comply with a Medium-Term Objective (MTO) based on the general principle of a zero-structural budget balance. Starting from the standard European Commission methodology for calculating the structural budget, our paper shows that, by replacing the estimate of the potential output based on the NAWRU with a different notion and measure of potential output, the results in terms of fiscal policy space are significantly different. This outcome points out the distinct possibility that the actual fiscal policies of the member states of the EU may be driven and constrained by a measure that seriously limits their flexibility by several percentage points. While our empirical calculations refer to Italy, the point we address is general and relates to all member states, particularly those that in the past have been forced to restrictive policies while in recession.

Abstract

The outbreak of Covid-19 has played the role of a ‘game changer’ in the way countries of the Eurozone have faced the economic consequences of the pandemic crisis. This paper investigates what has happened to the interest rates of the sovereign bond in selected countries of the Eurozone during 2020. While the pandemic crisis can be interpreted as a symmetric shock, we found some important asymmetric consequences both in the sovereign bond market and the credit default swap market. Even though the European Central Bank (ECB) has played a fundamental role in easening tensions, especially with the announce of the Pandemic Emergency Purchase Programme (PEPP), countries with a higher pre-Covid level of the debt-to-GDP ratio have been found to undergo a significant jump in interest rates and a greater perceived risks of default. Important policies implications emerge in relation to the future role of the ECB.

Abstract

There is widespread evidence that smoking is more spread among the least well-off, but few studies investigate the effects of the differentiation of smoking products. This paper provides new evidence on income related inequality of five different products using a database from the Italian Population Survey on Alcohol and other Drugs. In particular, we use the 2014 and 2018 surveys to estimate how the consumption of manufactured cigarettes, roll-your-own cigarettes, cigars, pipe, and e-cigarettes is distributed across the income scale. The results confirm the existing evidence that the use of manufactured and roll-your-own cigarettes is more concentrated among the poor, while the use of cigars and pipe tends to be more concentrated among richer individuals. On the other hand, an important result emerges that the use of electronic cigarettes appears to be more concentrated among the poor, giving support either to the possibility that e-cigs may induce entry into smoking at cheaper prices for less affluent people or that it helps downtrading and quitting of traditional smokers in the lowest part of the income distribution. In both cases, the policy implications, for example of how to tax these alternative products, are relevant, especially because individual socio-economic characteristics (gender, income, education, working condition and geographical location) play a significant and differentiated role across smoking products.

Abstract

This paper presents novel estimates for the cyclically-adjusted primary balance for 18 countries of the Euro area over years 1999–2017. We improve the methodology adopted by the European Commission by using quarterly rather than annual frequency data and providing accurate identification of the budgetary items whose response can be considered automatic to the economic cycle. This disaggregated outcome combined with high frequency data marks a significant improvement with respect to previous studies. The empirical analysis is implemented on two sub-periods to examine the impact of governments’ discretionary fiscal policy before and after the Great Recession. The most striking policy implication is that even though the budgetary policy of most European countries can be qualified in principle as anticyclical, this outcome has been weakened by the impact of discretionary policies of many governments especially after the crisis. The results are robust to the use of different de-trending methods.

Abstract

In recent times, many countries have continued to deal with political instability due to difficulties in improving democratic practices and limiting episodes of violence and terrorism. Using a sample of 27 European Union (EU) countries observed yearly during the period 1999-2021, we empirically analyze how the domestic political instability of a given country can be affected by the degree of trade diversification adjusted for the political instability of the nonEU countries it trades with. We adopt a network-based approach and build a novel geopolitical dependency index. We find there is a risk of importing political instability along with international trade by increasing trade concentration or the import share from more politically unstable non-EU countries. Given the relevance of the United States and China for European economic activity, we also test our main hypothesis by adjusting the geopolitical dependency index. We see China's prominent role in trade and political tension in EU countries compared to the US.

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Abstract

The European Union's fiscal policy framework imposes constraints on individual countries' fiscal policies to ensure long-term financial sustainability. However, it is also designed to provide flexibility through the operation of "off-balance" automatic stabilisers. In practice, these rules have led to pro-cyclical measures in EU peripheral countries due to the way European institutions estimate the Non-Accelerating Wage Rate of Unemployment (NAWRU). The paper demonstrates the pro-cyclical nature of the current mechanism by combining empirical evidence covering the period 2002-2023 with a semi-analytical model of the potential output and NAWRU dynamics to estimate the change in the Cyclical Component due to the endogenisation of the variables relevant to the business cycle. Since the recent reform of the Stability and Growth Pact has maintained the core of this mechanism, the challenges identified for the period 2002-2023 are likely to persist in the upcoming years as well.

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Abstract

The European fiscal framework has recently been reformed, yet the concept of structural balance still plays a crucial role within it. This paper proposes a multidimensional approach to scrutinize the pro-cyclical tendencies embedded in European economic policies arising from the European Commission’s calculation methodology of potential output and structural balance. Initially, a theoretical model shows the vicious cycle dynamic that characterises the fiscal adjustment process during a recession when potential output is dependent on actual output. Subsequently, numerical simulations juxtapose this dynamic with a counterfactual scenario where potential output is only influenced by long-term supply factors. Finally, employing dynamic panel data analysis covering 26 EU countries from 1995 to 2023, on an annual basis, empirical evidence is presented to show the pro-cyclical nature of fiscal policies adopted by European governments. Importantly, these estimates facilitate the isolation of the proportion of the pro-cyclical effect attributed solely to the bias stemming from the endogeneity of potential GDP.

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Abstract

This study investigates the dynamics of health care mobility in Italy, where citizens have the freedom to access medical treatment across regions. More than half a million patients, primarily from the Southern regions, engage in healthcare mobility, resulting in a total expenditure of €3.7 billion in 2019. Leveraging a unique dataset spanning from 2002 to 2019, this research examines financial transactions, utilizes network analysis, and identifies influencing factors through a gravity model. Socioeconomic disparities and the availability of specialized services are key drivers of this mobility. Regions with higher healthcare quality and the presence of private licensed hospitals attract a larger number of patients. This study offers valuable insights into the intricacies of interregional healthcare mobility, which can inform healthcare policy and promote regional equity considerations.

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Abstract

An extensive economic literature has investigated the cyclical behaviour of the budget balance in response to the business cycle. However, little is known about the behaviour of one of its two main components, i.e. tax revenue. We shed new light on this issue by focusing on a panel of 27 EU countries for the period 1995-2022. Using a novel empirical strategy to pre-adjust each revenue item for the business cycle, we study the behaviour of personal income tax, corporate income tax, indirect taxes, social security contributions, and non-tax revenues. Considering different econometric techniques, we find a general and stable pro-cyclical behaviour for all tax items in the EU, except for corporate income tax. This behaviour is then analysed with the varyingcoefficient model, assessing the impact of a novel variable combining the stringency of the European fiscal framework and the debt-to-GDP ratio. Generally, this indicator seems to have intensified the procyclical trend of each revenue item.

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Abstract

The EU has embarked on multiple initiatives reflecting its commitment to environmental enhancement and sustainable transitions. Notable among these are the European Green Deal and the NextGenerationEU recovery plan, both pivotal in fostering eco-friendly policies and sustainable practices within the region. Conversely, the fiscal rules within the EU, designed to manage budgetary deficits and debt-to-GDP ratios, may pose challenges to the implementation of fiscal measures targeted at achieving environmental quality objectives. These regulatory constraints potentially curtail the fiscal space available for policies aligned with the environmental goals set forth by the EU. To address this issue, using a panel of 27 European member countries observed annually from 1995 to 2021, we investigate the impact of two different indicators on the overall carbon intensity: on the one hand, the implicit tax rate on energy reduces environmental pollution; on the other hand, an increase in the stringency of the European fiscal framework and/or the debt-to-GDP ratio increase carbon intensity. From a policy point of view, our outcomes stress the importance of shaping national and European regulations to foster more sustainable environmental development.

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Abstract

Oil constitutes more than one third of total energy available in the European Union (EU), which continues to depend heavily on fossil fuels. Russian exports have known a remarkable growth in the last two decades, making this country crucial – as the war in Ukraine has recently shown – in deciding the energy future of the EU. In this regard, we provide a comprehensive and dynamic measure of oil dependency, constructing the Multi-dimensional Oil Dependency Index (MODI) for EU-28 countries (including the United Kingdom) during the period 1999-2019. This composite index considers four different key dimensions of oil dependency, i.e. geopolitical, international, energy and economic dependencies, exploiting the multivariate technique of the Principal Component Analysis (PCA). The subsequent determination of rankings and their variation over time can be useful for policymakers to identify key area where to intervene and reduce dependency, as well as to set benchmarks for policy actions.

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Abstract

European Monetary Union continues to be characterised by significant macroeconomic imbalances. Germany has shown increasing current account surpluses at the expense of the other member states (especially the European periphery). Since the creation of a single currency has implied the impossibility of implementing competitive devaluations, trade imbalances within a monetary union can be considered unfair behaviour. We have modelled Eurozone trade flows in goods through a weighted network from 1995 to 2019. To the best of our knowledge, this is the first work that applies this methodology to this kind of data. Network analysis has allowed us to estimate a series of important centrality measures. A polarisation phenomenon emerges in relation to the growth of German dominance. The common currency has then not been capable to remove trade asymmetry, increasing the distance between surplus and deficit countries. This situation should be addressed with expansionary policies on the demand side at national and supranational level.

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Abstract

Analysing the sovereign bond and the CDS markets of eight Eurozone countries from 2019 to mid-2022, we document the different impacts of the COVID-19 outbreak and the war in Ukraine.

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Abstract

This paper investigates the association between income and the habit of smoking in 30 European countries. Using the European Health Interview Survey carried out between 2013 and 2015, the analysis focuses on the relationship among net monthly equivalised income of the household, the type of smoking behaviour, and the daily average number of cigarettes smoked. Income-related inequalities are estimated using the Erreygers Index. Results show that smoking is a habit which is mainly rooted in the lowest part of the income distribution both at individual and country level, regardless of the average level of per capita income. Considering that tobacco use worsens poverty conditions by diverting household spending from basic needs to tobacco itself, our results give support to a tax increase in order to discourage its use and to the implementation of educational and prevention programs aimed at helping people to quit smoking.

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Abstract

In the economic literature, there has been a large heterogeneity of results in relation to the impact of fiscal variables on interest rates. Focusing on the Italian economy and considering the nature of our interest rate determinants (public finance variables and nominal GDP growth), we decided to undertake a cointegration analysis relying on the Autoregressive Distributed Lag (ARDL) bound test approach, a particular suitable procedure within this peculiar framework, able to disentangle short-run and long-run dynamics. Our results are quite controversial, shedding new light on the role of gross debt and primary balance as a share of GDP in relation to the long-term Italian nominal interest rate. In this context, the ECB has probably played a crucial role, especially in the most severe phases of the Sovereign debt crisis. The European fiscal framework then shows further critical issues in relation to the new role that fiscal variables play within our econometric analysis.

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Abstract

In the European Union, heat-not-burn products indirectly fall under the EU Directive 64/2011, which regulates the taxation structure of manufactured tobacco within a well-defined supranational regulatory framework. For many countries, this has led to a taxation system consistent with that provided for traditional tobacco products. On the contrary, in Italy the taxation of this kind of products is based on a particular equivalence which does not reward the lower tobacco content — and, therefore, the lower harm — present in these new products. Our paper analyses the current legislation in Italy, proposing a reform that overcomes the current system of equivalence in favour of the actual tobacco content. The resulting reduction in tax revenue should be recovered by increasing the total incidence on traditional cigarettes and acting on the level of the specific excise duty. This would reconcile the objective of health protection with that of revenue, while leaving the price gap between the two markets unchanged.

Abstract

Il problema del debito pubblico non è nuovo per il nostro paese e, nel corso del tempo, il suo rapporto rispetto al Pil è sempre stato elevato e persistente. Alla fine degli anni Settanta, una volta venute meno quelle caratteristiche che avevano contenuto l’incremento di tale rapporto, come la significativa crescita economica e un contenuto tasso di interesse favorito da una politica monetaria accomodante, si assiste progressivamente a un suo aumento significativo non solo in termini relativi ma anche assoluti. Scomponendo i contributi apportati dalle politiche di bilancio e dalla crescita nominale del prodotto nell’influenzare la dinamica del rapporto debito/Pil, tale lavoro vuole ricostruire, in una prospettiva storica (1861-2019), le ragioni alla base della sua evoluzione.

Abstract

The taxation of tobacco products is part of a regulatory framework defined by the European Directive 64/2011. As for traditional cigarettes, Italy is characterized by an unbalanced taxation structure where the ad valorem component is significantly high. This imbalance appears almost unique when compared with the rest of the European countries. Furthermore, while the traditional tobacco products are well regulated by the European Directive 64/2011, new alternative products, such as electronic cigarettes and heated tobacco, have introduced new challenges in terms of regulation and taxation. In Italy, these products have a differential treatment compared with the traditional ones and are characterized by a significant lower incidence of the level of taxation. At the international level, a relevant fragmentation emerges, in particular for what concerns the level of taxation, giving rise to strong distortions in the markets of these products, which suggests the need for a comprehensive and harmonized reorganization at the European level, an issue on which the present paper suggests some proposals.

Abstract

Since the second half of the 1990s, with the beginning of the monetary unification process, interest expenditure has known a significant decrease both in absolute terms and in relation to GDP. The crisis of 2008 and the successive one of sovereign debts do not change the underlying trend of this variable but they significantly affect the width and the frequency of its cyclical fluctuations. From this point of view, in the new millennium, cyclical interest expenditure is characterized by significant pro-cyclicality. This connection, however, has lost its significance since the second half of 2012, when the President of the ECB, Mario Draghi, pronounced the "whatever it takes" speech. The evolution of the average return paid on newly issued securities was the fundamental determinant of the connection between interest expenditure and the economic cycle, although the emissions were always concentrated in the phases in which the yield was lower.

Abstract

This article presents an estimate of the cyclically-adjusted primary balance in Italy during the new Millennium (1999-2016) in order to assess the fiscal policy stance pursued during the period considered. If it is possible to initially qualify the fiscal policy as counter-cyclical, when the correction is made for the cycle, the budget balance becomes completely acyclical. Therefore, once the budget balance has been adjusted for the automatic influences deriving from the fluctuations of the economic cycle, the discretion of the Government has been explained in the weakening of the original anti-cyclical nature of the fiscal policy. Repeating the analysis in two different sub-periods with the 2008 crisis as a watershed, it emerged that this discretionary reductionist intervention has focused more on the period following the outbreak of the crisis, which highlights how discretionary fiscal policy has failed its expansive contribution in the most difficult moments of the crisis.

Abstract

L’obbligo, previsto dal Fiscal Compact, di rispettare il pareggio di bilancio contiene di per sé elementi di flessibilità proprio perché esprime quest’ultimo non in termini nominali bensì in termini strutturali, il che implica la possibilità che un sistema economico possa contrarre un deficit nelle fasi recessive del ciclo economico sulla base di un parametro che riassume la sensibilità del bilancio pubblico rispetto alle oscillazioni cicliche del prodotto intorno al suo trend potenziale e della distanza tra il Pil effettivo e il Pil potenziale. In tal senso, sembrerebbe rimanere intatta la possibilità di implementare politiche di bilancio espansive in funzione anticiclica, seppur in un ammontare limitato dall’ampiezza della recessione sperimentata e dal valore stimato della relazione intercorrente tra bilancio pubblico e ciclo economico. In realtà, gli ipotetici spazi di manovra fiscale risultano limitati dalla metodologia di calcolo del saldo strutturale adottata, di concerto con i diversi paesi membri, dalla Commissione Europea. In questo scenario, la nuova metodologia introdotta dalla Commissione Europea a partire dal 2014 per far fronte a tali problematiche è risultata insufficiente e inadeguata e una sua nuova modifica dovrebbe essere accompagnata da un ripensamento più generale circa la ragionevolezza di utilizzare il saldo di bilancio corretto per il ciclo economico come benchmark attraverso cui valutare la sostenibilità fiscale di un determinato paese.

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Abstract

In this paper, we will examine the role that small and medium-sized enterprises (SMEs) play in the European economy as a whole and, more specifically, in some of the main European countries and how this role has changed over the last years. In the second chapter, the research will analyse the number of enterprises and of persons employed, the contribution of enterprises to value added and the labour productivity in order to present and to understand the productive structure of SMEs in the European scenario. Other indicators are analysed (average size of enterprises and of firm entries and the density of SMEs) and they will indicate further specificities among the examined countries. In the third chapter, we will analyse some business demography indicators. After having presented the birth and death of enterprises, the research will go further by, firstly, trying to quantify the percentage share of micro and zero employee enterprises to the process of firm birth and death. Secondly, we will examine the five-years survival rates of enterprises and we will try to understand if there are relevant differences among enterprises with 10 or more employees, micro and zero-employee enterprises. Finally, we will discuss the main conclusions of our analysis in the last chapter. All the collected data will be presented in a statistical annex.