Carmelo Petraglia

Measuring the Underground Economy with the Currency Demand Approach: A Reinterpretation of the Methodology, With an Application to Italy

We contribute to the debate on how to assess the size of the shadow economy by proposing a reinterpretation of the traditional Currency Demand Approach (CDA) a la Tanzi. In particular, we introduce three main innovations. First, we take a direct measure of cash transactions (the flow of cash withdrawn from bank accounts relative to total noncash payments) as the dependent variable in the money demand equation. This allows us to avoid using the Fisher equation, overcoming two severe critiques to the traditional CDA. Second, we include among covariates two distinct measures of detected tax evasion, in place of the tax burden level. Finally, we control also for a new criminal component of the shadow economy, considering money demand for illegal activities like drug dealing and prostitution. We propose an application of this modified-CDA to a panel of 91 Italian provinces for the years 2005-2008.

Footloose capital and productive public services

We analyse in a Footloose Capital productive public services provided by a central government aiming at reducing regional disparities. Two countervailing effects occur - one upon productivity and another upon local demand - the relative strength of which depends upon the financing scheme. Only if the rich region contributes sufficiently to the financing of the public services in the poor region, the poor region will actually gain. In studying these questions we pay particular attention to the dynamic adjustment processes and to the role of trade freeness.

R&D Public Expenditure, Knowledge Spillovers and Agglomeration: Comparative Statics and Dynamics

Since the introduction of the influential core-periphery (CP) model by Krugman (1991),New EconomicGeography (NEG) models have provided a natural framework for non-linear dynamic analysis.1 Moreover, as shown by the comprehensive picture of policy implications of the NEG paradigm provided by Baldwin et al. (2003), a well established finding is that policy changes have non-linear effects on industrial location, in general.

Regional tax surplus and federal reform. How much will remain of regional and redistributive policies

In this paper we discuss the validity of the arguments of those who look to the federalist reform as a tool to return to the central and northern regions resources drained by the waste of the Mezzogiorno, highlighting how the confusion between problems of public administration efficiency and legitimacy and intensity of political and regional redistribution might endanger the inter-regional equalization deriving from the progressivity of tax system and the public commitment to territorial rebalancing. More specifically, examining the regional distribution of public spending per capita over the past 15 years, we show that, for both components of current account and capital account, the hypothesis of excessive transfers to the Mezzogiorno is not supported by empirical evidence. The thesis of the excessive size of transfers to the southern regions is then evaluated and rejected on the basis of the comparison between actual and «theoretical» tax surplus that we calculated for the period 2004-2006, corresponding to the regional surplus or deficit implicit in the functioning of a tax system based on a progressive personal income tax (IRPEF) and in the action of territorial redistribution policies which aims at investing in the southern regions a minimum of 45% of total public expenditure on capital account.

Redistribution and Risk Sharing in Italy: Learning from the Past

ABSTRACT Redistribution and risk sharing in Italy: learning from the past. Regional Studies. This paper investigates the role of public policies in Italy by assessing both the redistribution and the risk-sharing functions of interregional net fiscal flows in the long run. Its comparative approach allows one to contrast results obtained for two periods characterized by diverse regional policy and dynamics of regional convergence. Although based on a specific example, the evidence supports more general conclusions: when assessing the regional redistributive and risk-sharing power of national fiscal policies, many different factors related to the existing policy regime should be accounted for, particularly the distribution of government spending between current expenditure and public investment.

Innovation and Cost Efficiency in the Banking Industry: The Role of Electronic Payments: The Role of Electronic Payments

This paper presents new evidence on the assessment of banks’ cost efficiency gains stemming from ICT adoption. With respect to the existing literature we introduce two novelties. First, banking operating costs are explained in terms of a commonly used measure of IT innovation (the relative diffusion of ATMs) and a new variable defined as automated payment transactions. Second, the results obtained via standard parametric estimation methods are compared with those obtained via nonparametric estimation techniques. Using an original dataset of Italian banks observed in the period 2006–2010, we do not find clear cost efficiency enhancing effects due to ATMs diffusion. On the other hand, the diffusion of electronic payments shows a significant effect in terms of cost inefficiency reduction.

Policy Issues in NEG Models: Established Results and Open Questions

This paper provides a non-technical overview of NEG models dealing with policy issues. Considered policy measures include alternative categories of public expenditure, international tax competition, unilateral actions of protection/liberalisation, and trade agreements. The implications of public intervention in two-region NEG models are discussed by unfolding the impact of policy measures on agglomeration/dispersion forces. Results are described in contrast with those obtained in standard non-NEG theoretical models. The high degree of abstraction limits the applicability of NEG models to real world policy issues. We discuss in some detail two extensions of NEG models to reduce this applicability gap: the cases of multi-regional frameworks and firm heterogeneity.

Regional convergence and the future of cohesion policies in the Eu

This paper contributes to the forthcoming debate on the reform of European cohesion policies providing two main recommendations. First, we highlight the need for policies improvements in order to i) maintain or even increase the resources allocated to less developed regions; ii) simplify procedures; iii) define a mission oriented towards new generations. Secondly, cohesion policiesshould be part of a general European economic governance that includes regional convergence among its general objectives. In this perspective, the future agenda should include three priorities: iv) a golden rule for strategic public investments; v) a suitable fiscal compensation system to compensate the Italian Mezzogiorno and other Eu-15 less developed regions for the competitive disadvantages caused by tax dumping and other national structural imbalances, particularly within the Eurozone; vi) rebalancing current Union geopolitical setups by prioritizing Eus Mediterranean policies.

Spending Review e divari regionali in Italia

This paper deals with the asymmetric regional effects of austerity policies in Italy in the current crisis. We discuss how austerity has caused a substantial downsizing of interregional redistribution, thus amplifying the economic downturn in Southern regions. First, we look at the regional distribution of the cost of austerity in terms of both higher tax burden and cuts in public expenditure. Then, we focus on the declining pattern experienced by both public investment and industrial policy.

Mutual Loan-Guarantee Consortia and the crisis: reforms, new arrangements and old challenges

Italian Abstract: Il sistema italiano delle strutture di garanzia collettivi fidi (Confidi) riveste un ruolo di assoluta preminenza nel contesto europeo. Negli ultimi anni il numero di imprese associate e cresciuto senza sosta in tutto il Paese, ma il radicamento dei Confidi nel tessuto produttivo resta una prerogativa delle regioni centrosettentrionali. In definitiva, i Confidi danno dimostrazione di essere alleati importanti del sistema produttivo, fin dove possono arrivare con le proprie forze, ma vengono messi a dura prova da un ciclo economico avverso, e da un contesto normativo non sempre pienamente coerente.English Abstract: Mutual Loan-Guarantee Consortia (MLGC) facilitate the matching of demand and supply in the credit market and have played an important role in mitigating credit constraints for Italian SMEs during the financial crisis. However, the Italian MLGC system is currently experiencing tough times due to a number of reasons. In this short paper, we first review the most recent performances of MLGC, paying particular attention to their regional distribution. We then provide some remarks on the proposal of reform of the MLGC legislation.