Economia Politica. Rivista di teoria e analisi
Abstracts of articles published in no.3, 2000
Sommari degli articoli pubblicati nel n.3, 2000
Summaries
EDITORIAL NOTE: IN MEMORY OF GIORGIO FUĀ
A Master of Political Economy. A Memory of Giorgio Fuā
by Giacomo Becattini
A Great "Poet" of Development
by Alberto Quadrio Curzio
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Introductory Note
Flexible Compensation Systems and Worker Participation to the Firm (J.E.L. J33, J53, M12)
by Paolo Pini
In the recent debate, it has been suggested to strength the worker participation to the firm through flexible compensation systems. The linkage between compensations and firm performance is viewed as a tool for increasing firm efficiency and competitiveness. The economic theory suggests various macro- and microeconomic motivations behind the adoption of flexible compensation systems. While the macroeconomic motivations have been largely criticised (on theoretical and empirical grounds), the microeconomic explanations are now very popular, acquiring relevance also for policy makers. This note is focus on the microeconomic motivations and their empirical evidence, along with two different concepts of flexibility, defensive and innovative flexibility. The importance of distinguishing among a demand for economic participation vs. a demand for worker participation in the decision-making process within the firm is pointed out, together with some policy options aimed at sustaining the diffusion of flexible compensation systems.
Articles
The Economy and the Art (J.E.L. L820, Z100)
by Guido Candela and Massimiliano Castellani
This work consists of an interpretation of the relationship between art and economy, in the framework of the more general relationship between art and science. Starting from the historical presupposition that the dual concept of economy and art has lead to interesting results, we affirm that in theory not only is this approach possible but also legitimate. To prove our proposition, we have followed a very simple reasoning: if scientific knowledge and artistic knowledge have similar characteristics, and if economy is a science, then the numerous links between economy and art (and consequently the economists' interest in issues related to the field of art) are not surprising. Our thesis is supported both through a static approach, and through a dynamic one.
However the art economy has only recently become an actual sector of political economy, that is since when economists have started to focus on issues raised by a precise object of search, rather than an indistinct object of interest: the themes currently tackled are not connected with those occasional or personal determinants that stimulated past - however important - researches.
The Fair Wage-Effort Hyphotesis and Factor Intensity Reversals (J.E.L.: J30; F11)
by Adriana Barone and Paolo Vinci
In this paper we consider the Bhagwati and Srinivasan model (1971) which takes into account the impact of wage differentials on production response and Factor-Price Equalization Theorem. We modify it by introducing the fair wage-effort hypothesis. The most interesting result concerns the relationship between factor intensity and wage rewards: the main theorems of international trade hold if workers of the capital intensive sector receive higher wages while, if higher wages are received by workers in the labour intensive sector, the theorems do not hold.
The Possibility of Ringing Twice: Banking Contracts, Usury, Property Rights and Renegotiations (J.E.L. G18, K42)
by Marco Battaglini and Donato Masciandaro
The aim of this work is to show theoretically the specificity of usury respect to the bank loan contracts. We prove that, in order to finance an investment project in a legal environment characterised by insufficient enforcement of property rights and asymmetric information, the usury lender can be more efficient than the legal one. Usury can be cheaper than the bank loan contract because in the usury contract the debt renegotiations are more likely to be implemented, given specific features of the usurer technology and a entrepreneur's decreasing risk aversion. We also show that an high level of interest rate do not represent a necessary nor a sufficient condition for the existence of usury contracts. Therefore the Italian Law Against Usury, based on the assumption that sufficient high interest rates are likely to be linked with usury agreements, is absolutely inconsistent with the above economic approach.
Credit Multiplier and Its Consequences on Rationing Originated by Certain Conditions of Informational Asymmetry (J.E.L.: D82, D45, E51, G21).
by Giovanni Cesaroni
Credit endogenity, that is to say the capacity of the banking system to expand credit over the amount given by the endowment of monetary savings, has very serious effects on the equilibrium of one of the best known and most general models explaining the phenomenon of credit rationing, that of Stiglitz and Weiss (1981). We show that the credit multiplier drives the probability to obtain a credit-rationing equilibrium near to zero. Our analysis it is also an example of the fact that agency costs can be ruled out by the monetary nature of banking liabilities and the related function of payments-intermediation, two factors that are being wholly neglected within the predominant approach of contemporary banking theory.
Review Article
Generational Acconting and Fiscal Policy Sustainability (J.E.L. H60, H55, J11)
by Carlo Mazzaferro
This paper is a survey of Generational Accounting, an estimation tecnique introduced by Auerbach - Gokhale - Kotlikoff (1992) in order to gauge the sustainability of fiscal policy. Generational Accounting is based on the government intertemporal budget constraint, and indicate the present value of net taxes that current and future generations are expected to pay given the current fiscal policy and the government net wealth. In a OLG model we show that the usefulness of GA depends on the pure life cycle model. In presence of liquidity constraints and/or of ricardian neutrality GA does not give a correct description of the intergenerational effects of fiscal policy. Even in the LCH model GA ignores the effects of taxes and transfers on goods and factors gross prices, i.e. it does not take accont of general equilibrium effects. The conclusion is that GA is useful in order to give insights on the long term trends of fiscal policy, especially when they redistribute resources across generation. However GA should not replace the other fiscal policy indicators derived from the public budget.
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