Social capital formation across space: proximity and trust in European regions

An extensive economics and regional science literature has discussed the importance of social capital for economic growth and development. Yet, what social capital is and how it is formed are elusive issues, which require further investigation. Here, we refer to social capital in terms of civic capital and good culture , as rephrased by Guiso, Sapienza and Zingales (2010) and Tabellini (2010). The accumulation of this kind of capital allows the emerging of regional informal institutions, which may help explaining diff erences in regional development. In this paper, we take a regional perspective and use exploratory space and space-time methods to assess whether geography, via proximity, contributes to the formation of social capital across European regions. In particular, we ask whether generalized trust, a fundamental constituent of social capital and an ingredient of economic development, tends to be clustered across space and over time. From the policy standpoint, the spatial hysteresis of regional trust may contribute to the formation of spatial traps of social capital and act as a further barrier to regional economic development and convergence.

Still More On Why We Should Bury The Marginal Productivity Theory Of The Price Of Capital: A Supplementary Note

The purpose of this note is to supplement the author’s earlier remarks on the unsatisfactory nature of the neoclassical account of how the return on capital is determined. (See Strathclyde Discussion Paper 12-03: “The Marginal Productivity Theory of the Price of Capital: An Historical Perspective on the Origins of the Codswallop”). The point is made via a simple illustration that certain matters which are problematical in neoclassical terms are perfectly straightforward when viewed from a classical perspective. Basically, the marginalist model of the nature of an economic system is not fit for purpose in that it fails to comprehend the essential features of a surplus-producing economic system as distinct from one merely of exchange.

Human capital, social mobility and the skill premium

This paper develops a dynamic general equilibrium model to highlight the role of human capital accumulation of agents differentiated by skill type in the joint determination of social mobility and the skill premium. We first show that our model captures the empirical co-movement of the skill premium, the relative supply of skilled to unskilled workers and aggregate output in the U.S. data from 1970-2000. We next show that endogenous social mobility and human capital accumulation are key channels through which the effects of capital tax cuts and increases in public spending on both pre- and post-college education are transmitted. In particular, social mobility creates additional incentives for the agents which enhance the beneficial effects of policy reforms. Moreover, the dynamics of human capital accumulation imply that, post reform, the skill premium is higher in the short- to medium-run than in the long-run.

Tax smoothing in a business cycle model with capital-skill complementarity

This paper undertakes a normative investigation of the quantitative properties of optimal tax smoothing in a business cycle model with state contingent debt, capital-skill complementarity, endogenous skill formation and stochastic shocks to public consumption as well as total factor and capital equipment productivity. Our main finding is that an empirically relevant restriction which does not allow the relative supply of skilled labour to adjust in response to aggregate shocks, signi cantly changes the cyclical properties of optimal labour taxes. Under a restricted relative skill supply, the government fi nds it optimal to adjust labour income tax rates so that the average net returns to skilled and unskilled labour hours exhibit the same dynamic behaviour as under fl exible skill supply.

Human Capital in Economic Development: From Labour Productivity to Macroeconomic Impact

Micro-econometric evidence reveals high private returns to education, most prominently in low-income countries. However, it is disputed to what extent this translates into a macro-economic impact. This paper projects the increase in human capital from higher education in Malawi and uses a dynamic applied general equilibrium model to estimate the resulting macroeconomics impact. This is contingent upon endogenous adjustments, in particular how labour productivity affects competitiveness and if this in turn stimulates exports. Choice among commonly applied labour market assumptions and trade elasticities results in widely different outcomes. Appraisal of such policies should consider not only the impact on human capital stocks, but also adjustments outside the labour market.

Debunking Mill’s “Fourth Fundamental Proposition on Capital”

J S Mill’s enigmatic "Fourth Proposition on Capital" has been brought to our notice by Steven Kates (2015). Kates takes a positive view of the proposition. Our focus is not, however, on Kates, but on the aforesaid proposition. The purpose of this paper is to demonstrate, via close examination of Mill’s explanatory examples, just how unsatisfactory are its foundations. We conclude that the doubters are justified: Mill’s Fourth Proposition is, demonstrably, a muddle.

Natural Capital's perception by Kodagu communities: a comparative study (Karnataka, India)

When we ask ourselves about a concrete definition of “Natural Capital” we can find a large and wide range of conceptions, which are attached to it. These can turn out to be confusing and contradictory in some cases. In theory, through books and different studies we know natural resources are composed by all the natural actives originated by the nature itself. Besides, these conform a patrimony for society as them are translated into a path towards economy: The Natural Capital. May not the Natural Capital be an easy conception to put in terms of economy it turns out to be an important capacitor for economy growth in most countries. In any case, we can clearly distinguish two ways as Natural Capital can be seen. One may elaborate a definition about it by reading what others have previously written, those who usually are quite far from the direct use of natural resources. On the other hand it would also be interesting to conform a definition of it by asking people who are constantly in contact with natural resources and consequently contribute to form the Natural Capital.

Human capital spillovers, productivity and regional convergence in Spain

This paper analyses the differential impact of human capital, in terms of different levels of schooling, on regional productivity and convergence. The potential existence of geographical spillovers of human capital is also considered by applying spatial panel data techniques. The empirical analysis of Spanish provinces between 1980 and 2007 confirms the positive impact of human capital on regional productivity and convergence, but reveals no evidence of any positive geographical spillovers of human capital. In fact, in some specifications the spatial lag presented by tertiary studies has a negative effect on the variables under consideration.

El impacto diferencial del capital social sobre la salud de la población autóctona y los inmigrantes residentes en Cataluña

El fenómeno de la inmigración está transformando las sociedades receptoras. Un creciente número de estudios revela que la reciente inmigración en España es principalmente motivada por razones económicas y por tanto se trata de una población compuesta por gente joven, cualificada y sana. Por otro lado, hay cada vez más evidencia sobre la relevancia del capital social sobre la salud. Nuestro trabajo pretende crear un puente entre la literatura sobre la inmigración y la que relaciona el capital social y la salud. El presente trabajo tiene un doble objetivo. Por un lado, queremos dilucidar la verdadera relación entre el capital social y la salud utilizando por primera vez datos de Cataluña. Por otro lado, pretendemos determinar un posible efecto diferencial del capital social sobre la salud en tres grupos de población, más concretamente, los nacidos en Cataluña, los españoles nacidos fuera de Cataluña y los inmigrantes extranjeros. Utilizamos datos de la Encuesta de Salud de Cataluña 2006, que contiene una muestra representativa del colectivo inmigrante. Los indicadores contextuales provienen de fuentes alternativas. Para determinar la relación entre el capital social y la salud (salud auto-percibida y salud mental, GHQ-12), controlando por otros factores determinantes, estimados modelos multinivel separadamente para las tres muestras poblacionales. Distinguimos entre capital social individual y capital social comunitario. Nuestros resultados revelan que el capital social individual tiene mayor impacto sobre la salud que el capital social comunitario. Sin embargo, independientemente de los indicadores de capital social empleados en el análisis, observamos que el capital social ejerce un efecto beneficioso tanto para la salud física como la salud mental en Cataluña. Además, encontramos que las redes sociales son más importantes para la salud de la población autóctona, que para la salud de los inmigrantes. Creemos que potenciar la acumulación de capital social puede ser un instrumento potencialmente eficaz (y que requiere, en comparación con otras medidas políticas, menos recursos económicos) para la consecución de los objetivos relacionados con la mejora de la salud y la reducción de las desigualdades en salud entre los colectivos de nativos e inmigrantes. Palabras clave: estado de salud, capital social, inmigración

Relationship between technological progress, capital elasticity and emissions of industrial pollutants for the production sectors in Catalonia

As is known, the Kyoto Protocol proposes to reinforce national policies for emission reduction and, furthermore, to cooperate with other contracting parties. In this context, it would be necessary to assess these emissions, both in general and specifically, by pollutants and/or among productive sectors. The object of this paper is precisely to estimate the polluting emissions of industrial origin in Catalonia in the year 2001, in a multivariate context which explicitly allows a distinction to be made between the polluter and/or the productive sector causing this emission. Six pollutants considered, four directly related to greenhouse effect. A multi-level model, with two levels, pollutants and productive sectors, was specified. Both technological progress and elasticity of capital were introduced as random effects. Hence, it has been permitted that these coefficients vary according to one or other level. The most important finding in this paper is that elasticity of capital has been estimated as very non-elastic, with a range which varies between 0.162 (the paper industry) and 0.556 (commerce). In fact, and generally speaking, the greater capital the sector has, the less elasticity of capital has been estimated. Key words: Kyoto protocol, multilevel model, technological progress

Is the Spanish Inheritance and Gift Tax incompatible with the free movement of workers and capital?: The reasoned opinion of the EU Commission IP/10/513

The aim of my speech is answering to the question if the Spanish Inheritance and Gift Tax is incompatible with the free movement of workers and capital. We are going to pay special attention to the European Commission’s request to Spain to change its Inheritance and Gift Tax provisions for Non-Residents or Assets held abroad. In order to answer to the question mentioned above five points will be explained. At first place I am going to describe the infrengement procedure established in the Article 258 that the EU Commission can follow when a Member State doesn’t comply with Community Law. At second place, we are going to explain what is the content of the EU Commission delivered on 5th of may 2010 regarding the spanish Inheritance and Gift Tax. Then, we will analise what establishes the Community Law regarding the freedom of workers and capital and how they are understood by the EU Court of Justice in similar cases. Finally, we are going to provide possible amendments that Spain could undertake.

Involvement of PPARβ/δ in mesenchymal-epidermal interactions during skin wound healing

SUMMARY : Skin wound repair is a complex and highly coordinated process, where a variety of cell types unite to regenerate the damaged tissue. Several works have elucidated cellular and molecular mechanisms, in which mesenchymal-epidermal interactions play an essential role for the regulation of skin homeostasis and repair. Peroxisome Proliferator-Activated Receptors (PPARs) are ligand-activated transcription factors that belong to the nuclear receptor superfamily. Three related isotypes (PPARα, PPARß/δ and PPARγ) have been found, which exhibit distinct tissue distribution and specific physiological functions. PPARß/δ was identified as a crucial player of skin homeostasis. In the mouse skin, PPARß/δ has been described to control proliferation-differentiation state, adhesion and migration, and survival of the keratinocytes during healing. PPARß/δ has been implicated as well in the development of the hair follicles, in which mesenchymal-secreted hepatocyte growth factor (HGF) is involved. These data suggest that the biological activity of PPARß/δ is modulated by mesenchymal-epidermal interactions and that, in turn, PPARß/δ also modulates some of these signals. The aim of the present work was to elucidate the nature of the signals exchanged between the epidermis and dermis compartments, and more particularly those which are under the control of PPARß/δ. In the first part of the study, we showed that PPARß/8 in dermal fibroblasts down-regulates the mitotic activity of keratinocytes by inhibiting the IL-1 signalling pathway via the production of secreted IL-1 receptor antagonist (sIL-1Ra), a natural antagonist of this signalling. The regulation of IL-1 signalling by PPARß/δ is required for anon-pathological skin wound repair. These findings provide evidence for a novel homeostatic control of keratinocyte proliferation and differentiation mediated by the regulation of IL-1 signalling via dermal PPARß/δ fibroblasts. Proteolysis of the extracellular matrix (ECM) is a key process involved in wound repair and modifications in its activity are often associated with an alteration óf the wound closure. This process implies specific proteinases, as matrix metalloproteinases (MMPs), which are finely modulated by IL-1 signalling. In line with the first results, the second part of the work showed that MMP8 and MMP13, which are two important collagenases involved in mouse skin wound repair, are regulated by PPARß/δ. Their expression is indirectly down-regulated by dermal PPARß/δ, via the production of sIL-1Ra, resulting in the inhibition of IL-1 signalling, known to regulate the expression of numerous MMPs. We suggest that, in absence of PPARß/δ, the positive regulation of these two collagenases could participate to the delay of skin wound healing, which has been observed in mice deleted for PPARßlS. The potential therapeutic role of PPARß/b could be as well extending to inflammatory and hyperproliferative skin diseases involving IL-1 signalling, such as psoriasis or skin cancers. Quite interestingly, MMP1 (analogue of mouse MMP13) plays an essential role in human photoaging, suggesting that PPARß/δ could as well be an attractive target for photoprotection. RESUME : La cicatrisation est un processus complexe et extrêmement organisé, impliquant un grand nombre de cellules qui s'unissent pour régénérer le tissu endommagé. De nombreux travaux nous ont éclairés sur les mécanismes cellulaires et moléculaires, dans lesquels les interactions épidermo-mésenchymateuses détiennent un rôle capital à la fois dans la régulation de l'homéostasie et dans la réparation de la peau. PPAR (Peroxisome proliferatar-activated receptor), qui appartient à la superfamille des récepteurs nucléaires, se définit comme un facteur de transcription activé par des ligands très spécifiques. Trois isotypes (PPARa, PPARß/δ et PPARy) ont été décrits et sont caractérisés par une distribution tissulaire et des fonctions physiologiques clairement définies. PPARß/δ a été identifié comme étant un important acteur dans l'homéostasie de la peau. Chez la souris, il a été décrit comme contrôlant l'état de prolifération et de différenciation, le processus d'adhésion et de migration, ainsi que la survie des kératinocytes au cours de la cicatrisation. PPARßIS a également été défini comme contrôlant le développement des follicules pileux, impliquant la sécrétion par le mésenchyme du facteur de croissance HGF. Ces données suggèrent que l'activité biologique de PPARß/δ est modulée par des interactions épidermo-mésenchymateuses, et qu'en retour, il possède la capacité de moduler certains de ces signaux. L`objectif de ce travail a été d'élucider la nature des signaux échangés entre les compartiments épidermique et dermique, et plus particulièrement ceux qui sont sous le contrôle de PPARß/δ. Dans la première partie de l'étude, nous avons montré que les fibroblastes exprimant PPARß/δ réduisent l'activité mitotique des kératinocytes en inhibant la voie de signalisation IL-1, via la production de sIL-1Ra (secreted IL-1 receptor antagonist), défini comme un antagoniste naturel de cette voie de signalisation. La régulation de cette dernière par PPARß/δ est donc nécessaire pour une cicatrisation de type non pathologique. Ces résultats offrent donc une nouvelle preuve du contrôle de l'homéostasie et de l'état de prolifération/différenciation des kératinocytes par les fibroblastes exprimant PPARß/δ, en régulant la voie de signalisation IL-1. Le mécanisme de dégradation de la matrice extracellulaire (MEC) est une étape essentielle lors du processus de cicatrisation. Ainsi des modifications de cette activité protéolytïque sont souvent associées à une altération de la fermeture de la plaie. Ce processus implique des protéinases, comme les MMPs, qui sont finement modulés par la voie de signalisation IL-1. En accord avec les premiers résultats, la seconde partie des nos travaux a montré que les collagénases MMP8 et MMP13, connues pour être d'importantes molécules impliquées lors de la réparation tissulaire chez la souris, sont modulées par l'activité de PPARß/δ. Leurs expressions sont indirectement régulées par PPARß/δ, via la production. de sIL-1 Ra, entraînant ainsi l'inhibition de la voie de signalisation IL-1, décrite pour réguler l'expression de nombreuses MMPs, Nous suggérons donc qu'en absence de PPARß/δ, la régulation de ces deux collagénases pourrait être impliquée dans le retard de cicatrisation, observé chez les souris déficientes pour PPARß/δ. L'activité biologique de PPARß/δ pourrait être ainsi étendue à des maladies hyperproliferatives et inflammatoires de la peau, impliquant la voie de signalisation IL-1, comme le psoriasis ou certains cancers de la peau, et ce à des fins thérapeutiques. Il est aussi intéressant de relever que chez l'homme, MMP1 (présenté comme l'analogue de MMP13 de la souris} joue un rôle primordial dans le photo-vieillissement, nous suggérons donc que PPARß/δ pourrait ainsi être une cible attrayante concernant la photoprotection.

The Complementarity between segment disclosure and earnings quality, and its effect on cost of capital

We investigate the role of earnings quality in determining the levels of segment disclosure, and whether and how better quality earnings and segment disclosure influences cost of capital. Using a large US sample for the period 2001-2006, we find a positive relation between earnings quality and levels of segment disclosures. We also find that firms providing better quality segment information, contingent upon good earnings quality, enjoy lower cost of capital. We base our empirical tests on a self created index of segment disclosure. Our results contribute to a better understanding of (1) the incentives for providing segment disclosures, and (2) how accounting quality (quality of segment information and earnings quality) is related to the cost of capital.

Human capital and productivity

This paper surveys the empirical literature on human capital and productivity and summarizes the results of my own work on the subject. On balance, the available evidence suggests that investment in education has a positive, significant and sizable effect on productivity growth. According to my estimates, moreover, the social returns to investment in human capital are higher than those on physical capital in most EU countries and in many regions of Spain.

Misallocation of capital in a model of endogenous financial intermediation and insurance

In this paper we analyze productivity and welfare losses from capital misallocation in a general equilibrium model of occupational choice and endogenous financial intermediation. We study the effects of borrowing and lending, insurance, and risk sharing on the optimal allocation of resources. We find that financial markets together with general equilibrium effects have large impact on entrepreneurs' entry and firm-size decisions. Efficiency gains are increasing in the quality of financial markets, particularly in their ability to alleviate a financing constraint by providing insurance against idiosyncratic risk.