This paper revisits the effects of income changes on consumption of private households by focusing on a commonly disregarded and yet sizeable component of household expenditures: consumption of food and non-food consumer packaged goods. We exploit a new data source from the Netherlands that combines on the level of individual households administrative data from tax records with household scanner data, thus minimizing measurement error for both expenditures and the key explanatory variable, household disposable income. Even after controlling for differences in needs and for consumption volume, we document significant variation in expenditures and thereby reveal substantial scope for potential savings. Still, even though the Netherlands experienced a recession and a subsequent recovery in the analysed period from 2011 to 2018, we find only an economically small relationship with income, which is also not higher for households with low income or low liquidity. Despite remaining small in magnitude, we document inter alia a much higher coefficient for single households. We can exclude various potentially confounding effects as we show that retailers practice national pricing and as we control for sample composition and potential substitution between in-house and out-of-house consumption.
{"title":"Income and Consumption over the Business Cycle: Evidence from Matched Administrative Data","authors":"Calogero Brancatelli, R. Inderst","doi":"10.2139/ssrn.3923786","DOIUrl":"https://doi.org/10.2139/ssrn.3923786","url":null,"abstract":"This paper revisits the effects of income changes on consumption of private households by focusing on a commonly disregarded and yet sizeable component of household expenditures: consumption of food and non-food consumer packaged goods. We exploit a new data source from the Netherlands that combines on the level of individual households administrative data from tax records with household scanner data, thus minimizing measurement error for both expenditures and the key explanatory variable, household disposable income. Even after controlling for differences in needs and for consumption volume, we document significant variation in expenditures and thereby reveal substantial scope for potential savings. Still, even though the Netherlands experienced a recession and a subsequent recovery in the analysed period from 2011 to 2018, we find only an economically small relationship with income, which is also not higher for households with low income or low liquidity. Despite remaining small in magnitude, we document inter alia a much higher coefficient for single households. We can exclude various potentially confounding effects as we show that retailers practice national pricing and as we control for sample composition and potential substitution between in-house and out-of-house consumption.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132508825","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The present paper investigates unemployment hysteresis in 47 Asian countries using annual data from 1991 to 2019. A novel unit root framework, capable of modelling nonlinearity in the form of smooth break is applied due to the small sample sizes of the unemployment data. The results show evidence of hysteresis in most of the Asian countries except in Brunei, Malaysia, Qatar and Turkey. Labour markets in those countries with unemployment hysteresis therefore need to be proactive in their policies to address unemployment shocks, particularly those wealthy Asian nations among them.
{"title":"Unemployment Hysteresis in Asian Countries: Findings Based on Flexible Fourier Form and Structural Break Unit Root Tests","authors":"O. Yaya, Oluwadare O. Ojo, O. Awolaja","doi":"10.2139/ssrn.3909640","DOIUrl":"https://doi.org/10.2139/ssrn.3909640","url":null,"abstract":"The present paper investigates unemployment hysteresis in 47 Asian countries using annual data from 1991 to 2019. A novel unit root framework, capable of modelling nonlinearity in the form of smooth break is applied due to the small sample sizes of the unemployment data. The results show evidence of hysteresis in most of the Asian countries except in Brunei, Malaysia, Qatar and Turkey. Labour markets in those countries with unemployment hysteresis therefore need to be proactive in their policies to address unemployment shocks, particularly those wealthy Asian nations among them.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127379467","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Mogstad, M. Golosov, Michael Graber, David Novgorodsky
We study how Americans respond to idiosyncratic and exogenous changes in household wealth and unearned income. Our analyses combine administrative data on U.S. lottery winners with an event-study design that exploits variation in the timing of lottery wins. Our first contribution is to estimate the earnings responses to these windfall gains, finding significant and sizable wealth and income effects. On average, an extra dollar of unearned income in a given period reduces pre-tax labor earnings by about 50 cents, decreases total labor taxes by 10 cents, and increases consumption by 60 cents. These effects are heterogeneous across the income distribution, with households in higher quartiles of the income distribution reducing their earnings by a larger amount. Our second contribution is to develop and apply a rich life-cycle model in which heterogeneous households face non-linear taxes and make earnings choices along both intensive and extensive margins. By mapping this model to our estimated earnings responses, we obtain informative bounds on the impacts of two policy reforms: an introduction of UBI and an increase in top marginal tax rates. Our last contribution is to study how additional wealth and unearned income affect a wide range of behavior, including geographic mobility and neighborhood choice, retirement decisions and labor market exit, family formation and dissolution, entry into entrepreneurship, and job-to-job mobility. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
{"title":"How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income","authors":"M. Mogstad, M. Golosov, Michael Graber, David Novgorodsky","doi":"10.2139/ssrn.3878192","DOIUrl":"https://doi.org/10.2139/ssrn.3878192","url":null,"abstract":"We study how Americans respond to idiosyncratic and exogenous changes in household wealth and unearned income. Our analyses combine administrative data on U.S. lottery winners with an event-study design that exploits variation in the timing of lottery wins. Our first contribution is to estimate the earnings responses to these windfall gains, finding significant and sizable wealth and income effects. On average, an extra dollar of unearned income in a given period reduces pre-tax labor earnings by about 50 cents, decreases total labor taxes by 10 cents, and increases consumption by 60 cents. These effects are heterogeneous across the income distribution, with households in higher quartiles of the income distribution reducing their earnings by a larger amount. Our second contribution is to develop and apply a rich life-cycle model in which heterogeneous households face non-linear taxes and make earnings choices along both intensive and extensive margins. By mapping this model to our estimated earnings responses, we obtain informative bounds on the impacts of two policy reforms: an introduction of UBI and an increase in top marginal tax rates. Our last contribution is to study how additional wealth and unearned income affect a wide range of behavior, including geographic mobility and neighborhood choice, retirement decisions and labor market exit, family formation and dissolution, entry into entrepreneurship, and job-to-job mobility. \u0000 \u0000Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131635643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although mutual funds have widely varying voting patterns and predictable ideological disagreements, little is known about whether their underlying investors have similar preferences or sort by ideology into funds. I provide the first systematic documentation comparing the voting preferences of individual investors in the United States to those of the mutual funds they invest in. I find that individual investors are highly ideological in their voting. Environmental, Social, and Governance (ESG) funds have an ideologically distinct shareholder base of individual investors whose preferences are reflected in the votes of the ESG funds. ESG funds are unique in this respect; although funds have distinct voting ideologies, as do individual investors, a mutual fund’s voting choices generally have little or no relationship with those of its underlying investors. Limited attention may explain why individual investors with strong ideological preferences do not choose funds with similar ideologies, other than ESG funds, despite varied options to choose from. Although an individual’s ideology significantly relates to the binary categorization of the firms or funds she owns (for example, renewable energy or fossil fuel firms or ESG funds), there is no relationship to third party social responsibility scores of firms, funds, or fund holdings. Furthermore, even excluding ESG funds, individual investors with larger investments show a strong relationship between their individual voting ideologies and those of the funds they invest in.
{"title":"Do Mutual Funds Represent Individual Investors?","authors":"Jonathon Zytnick","doi":"10.2139/ssrn.3803690","DOIUrl":"https://doi.org/10.2139/ssrn.3803690","url":null,"abstract":"Although mutual funds have widely varying voting patterns and predictable ideological disagreements, little is known about whether their underlying investors have similar preferences or sort by ideology into funds. I provide the first systematic documentation comparing the voting preferences of individual investors in the United States to those of the mutual funds they invest in. I find that individual investors are highly ideological in their voting. Environmental, Social, and Governance (ESG) funds have an ideologically distinct shareholder base of individual investors whose preferences are reflected in the votes of the ESG funds. ESG funds are unique in this respect; although funds have distinct voting ideologies, as do individual investors, a mutual fund’s voting choices generally have little or no relationship with those of its underlying investors. \u0000 \u0000Limited attention may explain why individual investors with strong ideological preferences do not choose funds with similar ideologies, other than ESG funds, despite varied options to choose from. Although an individual’s ideology significantly relates to the binary categorization of the firms or funds she owns (for example, renewable energy or fossil fuel firms or ESG funds), there is no relationship to third party social responsibility scores of firms, funds, or fund holdings. Furthermore, even excluding ESG funds, individual investors with larger investments show a strong relationship between their individual voting ideologies and those of the funds they invest in.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"160 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127191136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-02-28DOI: 10.22904/SJE.2021.34.1.005
Yun-jung Kim
Using a multi-level factor model, we estimate a global factor and country factors using the real macroeconomic variables of 71 countries from 1970 to 2018. The global factor successfully captures economic fluctuations in the world economy and primarily comoves with the business cycles of developed countries. Over time, the importance of the global factor in developed countries’ business cycles has risen, while the share of economic fluctuations accounted for by the global factor has changed little and remains low among developing countries. Financial openness appears to be particularly important in promoting the global synchronization of business cycles after 1990.
{"title":"Global or Country Business Cycles: Developed versus Developing Countries","authors":"Yun-jung Kim","doi":"10.22904/SJE.2021.34.1.005","DOIUrl":"https://doi.org/10.22904/SJE.2021.34.1.005","url":null,"abstract":"Using a multi-level factor model, we estimate a global factor and country factors using the real macroeconomic variables of 71 countries from 1970 to 2018. The global factor successfully captures economic fluctuations in the world economy and primarily comoves with the business cycles of developed countries. Over time, the importance of the global factor in developed countries’ business cycles has risen, while the share of economic fluctuations accounted for by the global factor has changed little and remains low among developing countries. Financial openness appears to be particularly important in promoting the global synchronization of business cycles after 1990.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130594606","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Enterprise creation, destruction, and evolution support the transition to modern economic growth, yet these processes are poorly understood in industrializing contexts. We investigate Imperial Russia’s industrial development at the firm-level by examining entry, exit, and persistence of corporations. Relying on newly developed balance sheet panel data from every active Russian corporation (N > 2500) between 1899 and 1914, we examine the characteristics of entering and exiting corporations, how new entrants evolved, and the impact of founder identity on subsequent outcomes. Russian corporations operated flexibly and competitively, conditional on overcoming distortionary institutional barriers to entry that slowed the emergence of these leading firms in the Imperial economy.
{"title":"The Births, Lives, and Deaths of Corporations in Late Imperial Russia","authors":"Amanda Gregg, Steven Nafziger","doi":"10.2139/ssrn.3760595","DOIUrl":"https://doi.org/10.2139/ssrn.3760595","url":null,"abstract":"Enterprise creation, destruction, and evolution support the transition to modern economic growth, yet these processes are poorly understood in industrializing contexts. We investigate Imperial Russia’s industrial development at the firm-level by examining entry, exit, and persistence of corporations. Relying on newly developed balance sheet panel data from every active Russian corporation (N > 2500) between 1899 and 1914, we examine the characteristics of entering and exiting corporations, how new entrants evolved, and the impact of founder identity on subsequent outcomes. Russian corporations operated flexibly and competitively, conditional on overcoming distortionary institutional barriers to entry that slowed the emergence of these leading firms in the Imperial economy.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"281 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122938832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines whether the motivation of institutional investors in monitoring a firm can influence CEO compensation. We find that greater motivated monitoring institutional ownership is associated with a higher pay-performance sensitivity of CEO compensation, which cannot be explained by traditional measures of institutional ownership. Further, we find that the economic effect of institutional monitoring on the pay-performance sensitivity falls with decreasing institutions’ monitoring motivation. Finally, we document that CEO pay– performance sensitivity is more, if not only, related to the unsystematic component of corporate performance in firms with greater motivated monitoring IO. These results suggest that how well the institutions can serve their monitoring role and mitigate the agency problem between shareholders and managers depends on the proportion of ownership held by motivated monitoring institutions.
{"title":"Institutional Investor Monitoring Motivation and CEO Compensation","authors":"Cai Liu, Chao Yin","doi":"10.2139/ssrn.3726115","DOIUrl":"https://doi.org/10.2139/ssrn.3726115","url":null,"abstract":"This paper examines whether the motivation of institutional investors in monitoring a firm can influence CEO compensation. We find that greater motivated monitoring institutional ownership is associated with a higher pay-performance sensitivity of CEO compensation, which cannot be explained by traditional measures of institutional ownership. Further, we find that the economic effect of institutional monitoring on the pay-performance sensitivity falls with decreasing institutions’ monitoring motivation. Finally, we document that CEO pay– performance sensitivity is more, if not only, related to the unsystematic component of corporate performance in firms with greater motivated monitoring IO. These results suggest that how well the institutions can serve their monitoring role and mitigate the agency problem between shareholders and managers depends on the proportion of ownership held by motivated monitoring institutions.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122053529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research Summary: The economic center of gravity is shifting from mature markets to emerging regions. This shift provides a good opportunity to broaden and deepen our theoretical base of concepts and frameworks because emerging and mature regions differ significantly in their institutional regimes. Hence entrepreneurial resource mobilization in emerging regions could differ significantly because of theoretical differences in actors’ action logics and resource governance. The eight papers in this special issue provide new empirical evidence on antecedents and consequences of entrepreneurial resource mobilization efforts in emerging regions. Here, we briefly summarize the state of the field, introduce the articles by situating them in a novel theoretical framework on entrepreneurial resource mobilization, and finally using our framework, we suggest opportunities for future research on entrepreneurship in emerging regions. Managerial Summary: Entrepreneurship research has advanced mainly using empirical data from the developed economies of North America and Western Europe. Because emerging economies differ markedly in their institutional development from developed economies, this prior research is less likely to be useful to understand entrepreneurship in emerging regions - which are increasingly crucial components of the global economy. This special issue contains eight articles addressing different aspects of the entrepreneurial resource mobilization process using diverse research methods on empirical data drawn from a broad range of emerging economies. This introduction describes the state of the field prior to the special issue, introduces the special issue articles and identifies topics that still need further investigation. We distill the current state of knowledge and offer a roadmap for future scholarship.
{"title":"Entrepreneurship in Emerging Economies","authors":"M. Foo, B. Vissa, Brian Wu","doi":"10.2139/ssrn.3666851","DOIUrl":"https://doi.org/10.2139/ssrn.3666851","url":null,"abstract":"Research Summary: The economic center of gravity is shifting from mature markets to emerging regions. This shift provides a good opportunity to broaden and deepen our theoretical base of concepts and frameworks because emerging and mature regions differ significantly in their institutional regimes. Hence entrepreneurial resource mobilization in emerging regions could differ significantly because of theoretical differences in actors’ action logics and resource governance. The eight papers in this special issue provide new empirical evidence on antecedents and consequences of entrepreneurial resource mobilization efforts in emerging regions. Here, we briefly summarize the state of the field, introduce the articles by situating them in a novel theoretical framework on entrepreneurial resource mobilization, and finally using our framework, we suggest opportunities for future research on entrepreneurship in emerging regions. \u0000 \u0000Managerial Summary: Entrepreneurship research has advanced mainly using empirical data from the developed economies of North America and Western Europe. Because emerging economies differ markedly in their institutional development from developed economies, this prior research is less likely to be useful to understand entrepreneurship in emerging regions - which are increasingly crucial components of the global economy. This special issue contains eight articles addressing different aspects of the entrepreneurial resource mobilization process using diverse research methods on empirical data drawn from a broad range of emerging economies. This introduction describes the state of the field prior to the special issue, introduces the special issue articles and identifies topics that still need further investigation. We distill the current state of knowledge and offer a roadmap for future scholarship.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129735346","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Blundell, M. Borella, J. Commault, Mariacristina De Nardi
In old age, consumption can fluctuate because of shocks to available resources and because health shocks affect utility from consumption. We find that even temporary drops in income and health are associated with drops in consumption and most of the effect of temporary drops in health on consumption stems from the reduction in the marginal utility from consumption that they generate. More precisely, after a health shock, richer households adjust their consumption of luxury goods because their utility of consuming them changes. Poorer households, instead, adjust both their necessary and luxury consumption because of changing resources and utility from consumption.
{"title":"Why Does Consumption Fluctuate in Old Age and How Should the Government Insure it?","authors":"R. Blundell, M. Borella, J. Commault, Mariacristina De Nardi","doi":"10.3386/w27348","DOIUrl":"https://doi.org/10.3386/w27348","url":null,"abstract":"In old age, consumption can fluctuate because of shocks to available resources and because health shocks affect utility from consumption. We find that even temporary drops in income and health are associated with drops in consumption and most of the effect of temporary drops in health on consumption stems from the reduction in the marginal utility from consumption that they generate. More precisely, after a health shock, richer households adjust their consumption of luxury goods because their utility of consuming them changes. Poorer households, instead, adjust both their necessary and luxury consumption because of changing resources and utility from consumption.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134166893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Macroeconomists and political officers need rigorous, albeit realistic, quantitative models to forecast the future paths and dynamics of some variables of interest while being able to evaluate the effects of alternative scenarios. At the heart of all these models lies a standard macroeconomic module which, depending on the degree of sophistication and the research questions to be answered, represents how the economy works. However, the complete absence of a realistic monetary framework, along with the abstraction of banks and more generally of real-financial interactions, not only in dynamic stochastic general equilibrium (DSGE) models but also in central banks' structural econometric models, made it impossible to detect the rising financial fragility that led to the Great Recession. In this paper, we show how to address the missing links between the real and financial sectors within a post-Keynesian framework, presenting a quarterly stock-flow consistent (SFC) structural model of the Italian economy. We set up the accounting structure of the sectoral transactions, describing our "transaction matrix" and "balance sheet matrix," starting from the appropriate sectoral data sources. We then "close" all sectoral financial accounts, describe portfolio choices, and define the buffer stocks for each class of assets and sector in the model. We describe our estimation strategy, present the main stochastic equations, and, finally, discuss the main channels of transmissions in our model.
{"title":"A Stock-Flow Consistent Quarterly Model of the Italian Economy","authors":"F. Zezza, G. Zezza","doi":"10.2139/ssrn.3627413","DOIUrl":"https://doi.org/10.2139/ssrn.3627413","url":null,"abstract":"Macroeconomists and political officers need rigorous, albeit realistic, quantitative models to forecast the future paths and dynamics of some variables of interest while being able to evaluate the effects of alternative scenarios. At the heart of all these models lies a standard macroeconomic module which, depending on the degree of sophistication and the research questions to be answered, represents how the economy works. However, the complete absence of a realistic monetary framework, along with the abstraction of banks and more generally of real-financial interactions, not only in dynamic stochastic general equilibrium (DSGE) models but also in central banks' structural econometric models, made it impossible to detect the rising financial fragility that led to the Great Recession. In this paper, we show how to address the missing links between the real and financial sectors within a post-Keynesian framework, presenting a quarterly stock-flow consistent (SFC) structural model of the Italian economy. We set up the accounting structure of the sectoral transactions, describing our \"transaction matrix\" and \"balance sheet matrix,\" starting from the appropriate sectoral data sources. We then \"close\" all sectoral financial accounts, describe portfolio choices, and define the buffer stocks for each class of assets and sector in the model. We describe our estimation strategy, present the main stochastic equations, and, finally, discuss the main channels of transmissions in our model.","PeriodicalId":378721,"journal":{"name":"PSN: Other Comparative Capitalism (Topic)","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115190848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：