Metroeconomica最新文献

The COVID-19 pandemic has highlighted the need of maintaining financial and economic stabilization to mitigate the negative effects of the health crisis. In the context of a currency area, national governments count on national fiscal and macroprudential instruments to stabilize their own economy. Through a DSGE model for a monetary union I assess the welfare implications of different macroprudential-fiscal policy combinations, that are set with stabilization purposes. The findings confirm that for a supply and a demand shock, as the ones responsible for the economic crisis of 2020, the stabilizing policy mix might deteriorate welfare. By contrast, after a financial shock, similar to that of the Great Recession, the stabilizing policy combination strategies always achieve welfare gains.

Developing ideas suggested by James Meade, Harry Johnson and Neil Laing, we argue that when one compares alternative long-period positions, as in the work-horse two commodity, two primary input model, the household's expenditure and the prices of the commodities purchased cannot be treated as independent variables. We call such a full adaptation of households to consistent price configurations ‘full household equilibrium’. It is found that, at both the household and the aggregate levels, the purchased quantity of a ‘normal’ commodity can increase when its relative price rises. This basic result is readily applied both to aspects of welfare theory and to international trade theory.

UEFA EURO 2020 is the first multi-hosting mega-event developed on the entire continent. Often, mega-events concentrated in one place have turned out to have a modest, or adverse, economic impact due to high costs. Therefore, the ex-post assessment of the local impact of the four matches played in Rome as a mega-event is an interesting case study. To this end, we use a Computable General Equilibrium model based on the Lazio regional Social Accounting Matrix. We estimate a significant Gross Domestic Product multiplier at around 1.45. Furthermore, in terms of employment, the event generates an additional net volume equivalent to 9762 full-time jobs per year.

Supermultiplier models, which show how autonomous demand can drive both business cycles and long-run GDP growth, are based on a stability assumption. In this paper I look at recent efforts to justify this assumption, and argue that they are not convincing. The supermultiplier literature generally assumes that business investment reacts very slowly to changes in the state of the economy, but faster adjustment speeds are consistent with US data and can generate instability.

The name of Schumpeter is not among those of the precursors of post-Keynesian monetary theory. This seems understandable when considering Schumpeter's ferocious criticism of The General Theory. However, in recent years various authors have highlighted significant points of contact between Schumpeter's monetary theory and that of Keynes and of post-Keynesians. The objective of this work is not only to indicate the similarities between Schumpeter's monetary theory and that of the post-Keynesians, but rather to show that Schumpeter's approach to money and credit allows making post-Keynesian monetary theory more solid. In particular, we will show that Schumpeter's monetary theory enables to develop an explanation of the principle of effective demand sounder than that based on the simple presence of endogenous money and on the liquidity preference theory.

Developing country inflation is in the headlines again. Mainstream macroeconomics typically ignores the role of conflict while non-mainstream work tends to ignore macroeconomic constraints. This paper revisits the issue employing a dependent economy framework with eclectic characteristics. Specifically, I explore the mechanisms that propagate both real and monetary sources of inflation in the presence of real wage resistance and distributional conflict. The analysis shows that the inability to pay for subsidies with taxes or bond issuance in a stylized developing economy could create a situation where a relatively small shock leads to sustained and accelerating inflation and a wage-price spiral, thanks to conflicting claims on income. Subsidies to protect consumers from external price shocks could, similarly, leave a country vulnerable to accelerating wage-price spirals as the stabilizing relative price effects of a declining foreign asset position are dampened. Distributional conflict thus plays the role of sustainer rather than the primum mobile. Price controls could, in theory, better enable inflation management if these do not result in redistribution toward spenders. Such controls, however, create other trade-offs for countries facing balance-of-payments fragility.

We estimate a modified demand-and-distribution system for the 48 contiguous US states and the District of Columbia (DC) employing dynamic spatial panel data for 1980–2019. We allow for endogenous regressors, test for the presence, significance, and magnitude of spatial spillovers, and estimate immediate and cumulative effects on our endogenous variables of interest. Without testing for spatial dependence and spillovers, we estimate that output growth and capacity utilization in the sample US states and DC rise in response to an increase in their own wage share. When we test for spatial dependence and spillovers as required by the state-level nature of the data, and consider that the functional distribution of income and the level of economic activity are jointly determined, we estimate that a higher state wage share raises output growth in the own state and the neighboring states. Yet the effect of a change in the state wage share on capacity utilization in the own state and the neighboring states is not statistically significant. Meanwhile, a higher state output growth raises the wage share in the own state, but its impact on the wage share in the neighboring states is not statistically significant. A higher state capacity utilization raises the wage share in the own state, yet it reduces the wage share in the neighboring states.

This article considers a quantity-setting duopoly (Cournot rivalry) in which firms adopt an abatement technology as a device to improve the quality of products. Consumer preferences capture vertical product differentiation (quality) towards “green” products. This introduces a trade-off on the production side, as firms that do not abate, in turn, do not sustain any abatement cost but the demand for their product is low. On the contrary, firms that choose to abate incur abatement costs, but the demand for their product is high. The article aims to study and understand whether this kind of preference may lead firms to strategically invest in green technology and introduces a new, private-based (that contrasts the well-known public-based) mechanism through which pollution abatement can emerge as a sub-game perfect Nash equilibrium (SPNE) of a non-cooperative abatement decision game with product quality and complete information. The model is developed in a parsimonious way to pinpoint the main determinants of the endogenous market outcomes ranging from an anti-prisoner's dilemma in which self-interest and mutual benefit of non-abatement do not conflict to an anti-prisoner's dilemma in which self-interest and mutual benefit of abatement do not conflict, passing through to an anti-coordination scenario. Additionally, the welfare analysis reveals the existence of a win-win solution from a societal perspective. The article shows that the results obtained in the Cournot setting also hold considering a Bertrand duopoly.