Economia Politica. Rivista di teoria e analisi
Abstracts of articles published in no.2, 1999
Sommari degli articoli pubblicati nel n.2, 1999
Summaries
Introductory Note
The Inevitable Problem. A Note on the Microfoundations of Macroeconomics
(J.E.L. A1, B4)
by Corrado Benassi
The traditional approach to the microfoundations problem is often criticized as contradicting the theorist's freedom to interpret reality with her own conceptual frame – indeed, pre-analytic vision as such has no bearing on analytic soundness, and at the same time each reasearch programme sets its own analytical standards. The paper's main contention is that criticism along these lines runs counter to the economists' actual research practice and the construction of economic science resulting therefrom.
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The Inevitable Problem. A Note on the Microfoundations of Macroeconomics
(J.E.L. A1, B4)
by Giorgio Lunghini e Giorgio Rampa
In this note we put forward briefly some arguments which convince us that the "microfoundation problem" is ill-posed (at least, as it has been studied traditionally). First of all, that the only valid microfoundation is the walrasian one is no longer a tenable position. Secondly, even in this respect, the most usual hypothesesis accepted by the proponents of a rigorous microfoundation procedure is the representative agent, which is in contrast with their very viewpoint. Thirdly, we know of no analysis in which all macroeconomic propositions are deduced from microeconomic theorems (if this were possible, one cannot see how the distinction would be meaningful). Finally, we accept and motivate the idea that macroeconomics treats economic properties which are "emergent" with respect to the analysis of individual behaviour: but this is a completely different story from the one told in the usual micro-macro debate.
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Articles
Macroeconomics and Redistributive Policies. The Model with Liquidity Constraints (J.E.L.: D31, E44, H23)
by Raul de Luzenberger
This paper analyses the interaction between redistribution, public debt and fiscal policy in a model with liquidity constraints. This interaction determines the final shape of (wealth/income) distribution and the effects of fiscal policy. Thus, the social optimum redistribution is a function of the level of public debt, and of the rule of intergenerations redistribution implicit in the fiscal - balanced budget - policy rule. Financing the budget through public debt issuing increases inequality. And redistribution within living generations causes an additional intertemporal redistribution across generations, it affects the burden of public debt and its maximum sustainable level. On the one hand, these cross effects among policies imply that redistribution cannot be considered a fully independent instrument of anti-poverty policy. On the other hand, redistribution can be used to pursue macroeconomic objectives, and macroeconomic policy can also be used to shape the distribution. The paper examines some examples of these interactions through numerical simulations.
Intermediate Goods Imports and Technology Transfers (J.E.L.: F43, O14, O31, O41)
by Marco Maffezzoli
This paper studies the relationships between imports of technologically advanced intermediate goods, technology transfers, and economic development in a small open economy, within an endogenous growth framework with R&D. The model describes a small NIC that exports a final consumption good and imports technologically advanced intermediate goods, enjoying international knowledge spillovers directly proportional to the imports/output ratio. Starting from a situation in which the local knowledge stock is lower than the one available abroad, the model initially presents a higher growth rate than the foreign one, featuring a cath-up in the long run: during the transition, resources flow gradually from the R&D sector to the consumption good sector. These features may help explaining the Asian NICs growth experience: in particular, the model's dynamic behaviour of technological progress and sectoral resource allocation may justify their spectacular growth rates and their propensity to invest in the accumulation of technological capabilities.
Financial Structure. Asymmetric Information and the H.P. Minsky's
Investment Theory Revised (J.E.L.: E44)
by Lino Sau
This paper aims at two targets: firstly, showing the striking similarities between the New-Keynesian picture of the economy and the economics developed both by H.P.Minsky in the seventies and eighties and by M. Kalecki earlier in the century; secondly, securing adequate "microfoundations" to Minsky's theory of investment. Borrower's and lender's principle of increasing risk are revised so to consider situations of asymmetric information both ex- ante and ex-post. The revision moves from individual maximising behaviour.
Review Article
Institutional Design and Financial Stability in EMU (J.E.L. E52, E58)
by Marco Lossani, Piergiovanna Natale e Patrizio Tirelli
In this paper, the consequences on financial stability of the institutional design envisaged in the Maastricht Treaty - which implicitly assigns the objective of financial stability to the National Central Banks (NCBs) - are assessed. The Maastricht Treaty spells out precisely the roles of the European Central Bank (ECB) and NCBs within the European System of Central Banks (ESCB) as to achieve the objective of price stability, but it is not equally clear as far as the objective of financial stability is concerned. In an area like EMU with a high degree of financial and economic integration, the actions undertaken by NCBs in the fields of regulation, prudential supervision and Lending of Last Resort are characterized by relevant externalities across jurisdictions. The present institutional design does not allow EMU to benefit from the internalization of these spillovers since NCBs do not face incentives to undertake properly banking policy activities. Applying the principle of subsidiarity to the problem of power sharing between ECB and NCBs, the following suggestions for a revision of the institutional design are obtained: i) ECB should be assigned the task of coordinating regulation activities to avoid regulatory arbitrage, while prudential supervision should be managed jointly in a two-tier system by ECB and NCBs; the decision process pertaining the use of discount window and the Lending of Last Resort function should be centralized ; ii) the rules pertaining the working of TARGET and EMS 2 should be changed in order to limit the risk of a financial crises imported from pre-ins countries.
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