A comparison of the processes of institutionalisation of political economy in Spain and Italy (1860-1900)

[spa] El estudio de los procesos a través de los cuales la economía política se ha transformado en una disciplina académica es un área de creciente interés en la historia del pensamiento económico. Dicho estudio se ha abordado a través del análisis de la importancia de la economía política en un conjunto de instituciones, consideradas clave en la expansión de la economía en las sociedades occidentales en la segunda mitad del siglo XIX y primeras décadas del XX: universidades, sociedades económicas, publicaciones periódicas de contenido económico y los parlamentos nacionales. Este papel presenta una comparación entre los desarrollos del proceso de institutionalización de la economía política en España e Italia, a través del estudio de la presencia de esta disciplina en las instituciones mencionadas para el periodo 1860-1900. El objetivo es medir la posible existencia de una vía común en la institucionalización de la economía política en ambos países, como un primer paso hacia la elaboración de un modelo supranacional de institucionalización de la economía en este periodo.

A comparison of the processes of institutionalisation of political economy in Spain and Italy (1860-1900)

[spa] El estudio de los procesos a través de los cuales la economía política se ha transformado en una disciplina académica es un área de creciente interés en la historia del pensamiento económico. Dicho estudio se ha abordado a través del análisis de la importancia de la economía política en un conjunto de instituciones, consideradas clave en la expansión de la economía en las sociedades occidentales en la segunda mitad del siglo XIX y primeras décadas del XX: universidades, sociedades económicas, publicaciones periódicas de contenido económico y los parlamentos nacionales. Este papel presenta una comparación entre los desarrollos del proceso de institutionalización de la economía política en España e Italia, a través del estudio de la presencia de esta disciplina en las instituciones mencionadas para el periodo 1860-1900. El objetivo es medir la posible existencia de una vía común en la institucionalización de la economía política en ambos países, como un primer paso hacia la elaboración de un modelo supranacional de institucionalización de la economía en este periodo.

From urban political economy to the cultural political economy : rethinking culture and economy in and beyond the urban

Discussions about the culture-economy articulation have occurred largely within theconfines of economic geography. In addition, much attention has been diverted intocaricaturized discussions over the demise of political economy or the invalidity ofculturalist arguments. Moving the argument from the inquiry on the ¿nature¿ of theeconomy itself to the transformation of the role of culture and economy inunderstanding the production of the urban form from an urban political economy (UPE)this paper focuses on how the challenges posed by the cultural turn have enabled urbanpolitical economy to participate constructively in interdisciplinary efforts to reorientpolitical economy in the direction of a critical cultural political economy.

A New open economy macroeconomic model with endogenous portfolio diversification and firms entry

This paper provides a new benchmark for the analysis of the international diversi…cation puzzle in a tractable new open economy macroeconomic model. Building on Cole and Obstfeld (1991) and Heathcote and Perri (2009), this model speci…es an equilibrium model of perfect risk sharing in incomplete markets, with endogenous portfolios and number of varieties. Equity home bias may not be a puzzle but a perfectly optimal allocation for hedging risk. In contrast to previous work, the model shows that: (i) optimal international portfolio diversi…cation is driven by home bias in capital goods, independently of home bias in consumption, and by the share of income accruing to labour. The model explains reasonably well the recent patterns of portfolio allocations in developed economies; and (ii) optimal portfolio shares are independent of market dynamics.

Political economy of municipal water service privatization in Spain: a duration model analysis

This empirical work applies a duration model to the study of factors determining privatization of local water services. I assess how factors determining privatization decision evolve as time goes by. A sample of 133 Spanish municipalities during the six terms of office taken place during the 1980-2002 period is analyzed. A dynamic neighboring effect is hypothesized and successfully tested. In a first stage, private water supply firms may try to expand to regions where there is no service privatized, in order to spread over this region after having being installed thanks to its scale advantages. Other factors influencing privatization decision evolve during the two decades under study, from the priority to fix old infrastructures to the concern about service efficiency. Some complementary results regarding political and budgetary factors are also obtained

The Political Economy of Resource Rent Distribution

I model the link between political regime and level of diversification following a windfall of natural resource revenues. The explanatory variables I make use of are the political support functions embedded within each type of regime and the disparate levels of discretion, openness, transparency, and accountability of government. I show that a democratic government seeks to maximize the long-term consumption path of the representative consumer, in order to maximize its chances of re-election, while an authoritarian government, in the absence of any electoral mechanism of accountability, seeks to buy off and entrench a group of special interests loyal to the government and potent enough to ensure its short-term survival. Essentially the contrast in the approaches towards resource rent distribution comes down to a variation in political weights on aggregate welfare and rentierist special interests endogenized by distinct political support functions.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.

Shrouded costs of government: The political economy of state and local public pensions

Why do public-sector workers receive so much of their compensation in the formof pensions and other benefits? This paper presents a political economy model inwhich politicians compete for taxpayers' and government employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of promisedcompensation. If pension packages are "shrouded", so that public-sector workers better understand their value than ordinary taxpayers, then compensation will be highlyback-loaded. In equilibrium, the welfare of public-sector workers could be improved,holding total public-sector costs constant, if they received higher wages and lowerpensions. Centralizing pension determination has two offsetting effects on generosity:more state-level media attention helps taxpayers better understand pension costs, andthat reduces pension generosity; but a larger share of public-sector workers will votewithin the jurisdiction, which increases pension generosity. A short discussion of pensions in two decentralized states (California and Pennsylvania) and two centralizedstates (Massachusetts and Ohio) suggests that centralization appears to have modestlyreduced pensions, but, as the model suggests, this is unlikely to be universal.

Bringing actors and violent conflict into forced migration literature. A model of the decision to return

Populations displaced as a result of mass violent conflict have become one of the most pressing humanitarian concerns of the last decades. They have also become one salient political issue as a perceived burden (in economic and security terms) and as an important piece in the shift towards a more interventionist paradigm in the international system, based on both humanitarian and security grounds. The saliency of these aspects has detracted attention from the analysis of the interactions between relocation processes and violent conflict. Violent conflict studies have also largely ignored those interactions as a result of the consideration of these processes as mere reaction movements determined by structural conditions. This article takes the view that individual’s agency is retained during such processes, and that it is consequential, calling for the need to introduce a micro perspective. Based on this, a model for the individual’s decision of return is presented. The model has the potential to account for the dynamics of return at both the individual and the aggregate level. And it further helps to grasp fundamental interconnections with violent conflict. Some relevant conclusions are derived for the case of Bosnia-Herzegovina and about the implications of the politicization of return.

A Political Agency Model of Coattail Voting

In this paper, I provide a formal justi…cation for a well-established coattail effect, when a popular candidate at one branch of government attracts votes to candidates from the same political party for other branches of government. A political agency frame- work with moral hazard is applied to analyze coattails in simultaneous presidential and congressional elections. I show that coattail voting is a natural outcome of the optimal reelection scheme adopted by a representative voter to motivate politicians' efforts in a retrospective voting environment. I assume that an office-motivated politician (executive or congressman) prefers her counterpart to be affiliated with the same political party. This correlation of incentives leads the voter to adopt a joint performance evaluation rule, which is conditioned on the politicians belonging to the same party or different parties. The two-sided coattail effects then arise. On the one hand, the executive's suc- cess/failure props up/drags down her partisan ally in congressional election, which implies presidential coattails. On the other hand, the executive's reelection itself is affected by the congressman's performance, which results in reverse coattails. JEL classi…fication: D72, D86. Keywords: Coattail voting; Presidential coattails; Reverse coattails; Simultaneous elections; Political Agency; Retrospective voting.

Two-sided learning in new keynesian models: dynamics, (lack of) convergence and the value of information

This paper investigates the role of learning by private agents and the central bank (two-sided learning) in a New Keynesian framework in which both sides of the economy have asymmetric and imperfect knowledge about the true data generating process. We assume that all agents employ the data that they observe (which may be distinct for different sets of agents) to form beliefs about unknown aspects of the true model of the economy, use their beliefs to decide on actions, and revise these beliefs through a statistical learning algorithm as new information becomes available. We study the short-run dynamics of our model and derive its policy recommendations, particularly with respect to central bank communications. We demonstrate that two-sided learning can generate substantial increases in volatility and persistence, and alter the behavior of the variables in the model in a signifficant way. Our simulations do not converge to a symmetric rational expectations equilibrium and we highlight one source that invalidates the convergence results of Marcet and Sargent (1989). Finally, we identify a novel aspect of central bank communication in models of learning: communication can be harmful if the central bank's model is substantially mis-specified

A structural model of Australia as a small open economy

This paper sets up and estimates a structuralmodel of Australia as a small open economyusing Bayesian techniques. Unlike other recentstudies, the paper shows that a small microfoundedmodel can capture the open economydimensions quite well. Specifically, the modelattributes a substantial fraction of the volatilityof domestic output and inflation to foreigndisturbances, close to what is suggested by unrestrictedVAR studies. The paper also investigatesthe effects of various exogenous shockson the Australian economy.

A medium-scale open economy model of Australia

We estimate an open economy dynamic stochastic general equilibrium (DSGE)model of Australia with a number of shocks, frictions and rigidities, matching alarge number of observable time series. We find that both foreign and domesticshocks are important drivers of the Australian business cycle.We also find that theinitial impact on inflation of an increase in demand for Australian commoditiesis negative, due to an improvement in the real exchange rate, though there is apersistent positive effect on inflation that dominates at longer horizons.

An eclectic third generation model of financial and exchange rate crises

[cat] En aquest treball es presenta un model eclèctic que sistematitza la dinàmica de les crisis que s’autoconfimen, usant els principals aspectes de les tres tipologies dels models de crisis canviàries de tercera generació, amb la finalitat de descriure els fets que precipiten la renúncia al manteniment d’una paritat fixada. Les contribucions més notables són les implicacions per a la política econòmica, així com la pèrdua del paper del tipus de canvi com instrument d’ajust macroeconòmic, quan els efectes de balanç són una possibilitat real.