Understanding sources of the change in international business cycles

Macroeconomic activity has become less volatile over the past three decades in most G7 economies. Current literature focuses on the characterization of the volatility reduction and explanations for this so called "moderation" in each G7 economy separately. In opposed to individual country analysis and individual variable analysis, this paper focuses on common characteristics of the reduction and common explanations for the moderation in G7 countries. In particular, we study three explanations: structural changes in the economy, changes in common international shocks and changes in domestic shocks. We study these explanations in a unified model structure. To this end, we propose a Bayesian factor structural vector autoregressive model. Using the proposed model, we investigate whether we can find common explanations for all G7 economies when information is pooled from multiple domestic and international sources. Our empirical analysis suggests that volatility reductions can largely be attributed to the decline in the magnitudes of the shocks in most G7 countries while only for the U.K., the U.S. and Italy they can partially be attributed to structural changes in the economy. Analyzing the components of the volatility, we also find that domestic shocks rather than common international shocks can account for a large part of the volatility reduction in most of the G7 countries. Finally, we find that after mid-1980s the structure of the economy changes substantially in five of the G7 countries: Germany, Italy, Japan, the U.K. and the U.S..

Sources and propagation of international cycles: Common shocks or transmission?

This paper studies the generation and transmission of international cycles in a multi-country model with production and consumption interdependencies. Two sources of disturbance are considered and three channels of propagation are compared. In the short run the contemporaneous correlation of disturbances determines the main features of the transmission. In the medium run production interdependencies account for the transmission of technology shocks and consumption interdependencies account for the transmission of government shocks. Technology disturbances, which are mildly correlated across countries, are more successful than government expenditure disturbances in reproducing actual data. The model also accounts for the low cross country consumption correlations observed in the data.

Sources of comparative advantage in polluting industries

We study the determinants of comparative advantage in polluting industries. We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting industries. Further, we address the potential problem of reverse causality. We propose an instrument for environmental regulation based on meteorological determinants of pollution dispersion identified by the atmospheric pollution literature. We find that the effect of environmental regulation on the pattern of trade is causal and comparable in magnitude to the effect of physical and human capital.

Sources of comparative advantage in polluting industries (with appendix)

We study the determinants of comparative advantage in polluting industries. We combine dataon environmental policy at the country level with data on pollution intensity at the industry levelto show that countries with laxer environmental regulation have a comparative advantage in polluting industries. Further, we address the potential problem of reverse causality. We propose aninstrument for environmental regulation based on meteorological determinants of pollution dispersion identified by the atmospheric pollution literature. We find that the effect of environmentalregulation on the pattern of trade is causal and comparable in magnitude to the effect of physicaland human capital.

On the sources of business cycles in the G-7

This paper examines sources of cyclical movements in output, inflation and the term structure of interest rates. It employs a novel identification approach which uses the sign of the cross correlation function in response to shocks to catalog orthogonal disturbances. We find that demand shocks are the dominant source output, inflation and term structure fluctuations in six of the G-7 countries. Within the class of demand disturbances, nominal shocks are dominant, but their importance declined after 1982. Furthermore, there are no significant differences in the proportion of term structure variability explained by different structural sources at different horizons.

A theory of international conflict management and sanctioning

In this paper we analyze sanctioning policies in international law. We develop a model of international military conflict where the conflicting countries can be a target of international sanctions. These sanctions constitute an equilibrium outcome of an international political market for sanctions, where different countries trade political influence. We show that the level of sanctions in equilibrium is strictly positive but limited, in the sense that higher sanctions would exacerbate the military conflict, not reduce it. We then propose an alternative interpretation to the perceived lack of effectiveness of international sanctions, by showing that the problem might not be one of undersanctioning but of oversanctioning.

On the sources of the Great Moderation

The remarkable decline in macroeconomic volatility experienced by the U.S. economy since the mid-80s (the so-called Great Moderation) has been accompanied by large changes in the patterns of comovements among output, hours and labor productivity. Those changes are reflected in both conditional and unconditional second moments as well as in the impulse responses to identified shocks. That evidencepoints to structural change, as opposed to just good luck, as an explanation for the Great Moderation. We use a simple macro model to suggest some of the immediate sources which are likely to be behindthe observed changes.

The Phenomenon of international new ventures, global start-ups, and born-globals: what do we know after a decade (1993-2002) of exhaustive scientific inquiry?

In this paper, 27 studies from the last decade which deal more or less explicitly with the International New Venture, global start-up or born-global phenomenon are first identified, and then fully examined and critically assessed as a basis for obtaining an adequate view of the state-of-the-art of this increasingly important research avenue in the field of International Entrepreneurship (IE). The methodology used for this synthetic review allow us to analyze a number of recent, purposefully-chosen studies that are systematically compared along the following criteria: 1) main objective and type of research; 2) theoretical framework/s of reference, 3) methodological issues, and 4) main findings and/or conclusions. As a result of this literature review, a critical assessment follows in which the most relevant benefits and contributions as well as potential drawbacks, limitations or major discrepancies in the research activities conducted so far are discussed. Finally, some suggestions and implications are provided in the form of future research directions.

External sources of innovation and industry-university interaction:evidence from Spanish firms

This paper is about the firm innovation process and the cooperation of the innovative firms with other firms and public institutions. A special attention is paid to the cooperation with universities. We use the Technological Innovation Survey (TIS) from the Instituto Nacional de Estadística (Spain) in order to obtain data for 4,159 innovative firms. Our results show that firm's cooperation activities are closely linked to the characteristics of the industry and the firm as well as to the origin of public funds for R&D activities. Key words: Innovation, universities, Spanish economy. JEL code: O31, I20, L60

The making of international environmental agreements

We examine in this paper the formation and the stability of international environmental agreements when cooperation means to commit to a minimum abatement level. Each country decides whether to ratify the agreement and this latter enters into force only if it is ratified by a number of countries at least equal to some ratification threshold. We analyze the role played by ratification threshold rules and provide conditions for international environmental agreements to enter into force. We show that a large typology of agreements can enter into force among the one constituted by the grand coalition.

Sources of Competitiveness in Tourist Local Systems

At the end of the XIX Century, Marshall described the existence of some concentrations of small and medium enterprises specialised in a specific production activity in certain districts of some industrial English cities. Starting from his contribute, Italian scholars have paid particular attention to this local system of production coined by Marshall under the term industrial district. In other countries, different but related territorial models have played a central role as the milieu or the geographical industrial clusters. Recently, these models have been extended to non-industrial fields like culture, rural activities and tourism. In this text, we explore the extension of these territorial models to the study of tourist activities in Italy, using a framework that can be easily applied to other countries or regions. The paper is divided in five sections. In the first one, we propose a review of the territorial models applied to tourism industry. In the second part, we construct a tourist filiere and we apply a methodology for the identification of local systems through GIS tools. Thus, taxonomy of the Italian Tourist Local Systems is presented. In the third part, we discuss about the sources of competitiveness of these Tourist Local Systems. In the forth section, we test a spatial econometrics model regarding different kinds of Italian Tourist Local Systems (rural systems, arts cities, tourist districts) in order to measure external economies and territorial networks. Finally, conclusions and policy implications are exposed.

The building blocks of international ecological footprint inequality: a regression-based decomposition

This paper performs an empirical Decomposition of International Inequality in Ecological Footprint in order to quantify to what extent explanatory variables such as a country’s affluence, economic structure, demographic characteristics, climate and technology contributed to international differences in terms of natural resource consumption during the period 1993-2007. We use a Regression-Based Inequality Decomposition approach. As a result, the methodology extends qualitatively the results obtained in standard environmental impact regressions as it comprehends further social dimensions of the Sustainable Development concept, i.e. equity within generations. The results obtained point to prioritizing policies that take into account both future and present generations.

The Building Blocks of International Ecological Footprint inequality: A Regression-Base Decomposition

This paper performs an empirical Decomposition of International Inequality in Ecological Footprint in order to quantify to what extent explanatory variables such as a country’s affluence, economic structure, demographic characteristics, climate and technology contributed to international differences in terms of natural resource consumption during the period 1993-2007. We use a Regression- Based Inequality Decomposition approach. As a result, the methodology extends qualitatively the results obtained in standard environmental impact regressions as it comprehends further social dimensions of the Sustainable Development concept, i.e. equity within generations. The results obtained point to prioritizing policies that take into account both future and present generations. Keywords: Ecological Footprint Inequality, Regression-Based Inequality Decomposition, Intragenerational equity, Sustainable development.