Fabrizio Ferretti

Patterns of technical change: a geometrical analysis using the wage–profit rate schedule

In this paper we examine some basic stylized facts of economic growth according to the modern restatement of the classical theory of income distribution. In particular, we make use of a wage–profit frontier in order to explore the patterns of technical change experienced by a set of 18 industrialized economies, during the last 40 years. Our main purpose is to document the evolution of technical change. Using empirical evidence from the Italian industry, we also make an attempt to provide an explanation to data from a classical perspective, alternative to the standard approach founded on the aggregate production function.

Unhealthy Behaviours: An International Comparison.

In the current global economy, chronic non-communicable diseases (NCDs) have become the leading cause of death and a major health concern for both developed and developing countries. Among other factors, the worldwide spread of NCDs is driven by the globalisation of unhealthy habits. The purpose of this paper is to develop a simple statistic to measure, at the national level, the average population’s exposure to the main NCDs modifiable risk factors. The approach and methodology followed by the United Nations Development Programme to compute the Human Development Index (HDI) is applied to four basic indicators of NCD-related preventable risk factors (alcohol consumption, excess caloric intake, non-balanced diet and tobacco use) in 112 countries worldwide in 2012–14. We obtain a summary composite index, which we call the Unhealthy Behaviour Index (UBI), which ranks countries by the average level of the unhealthy habits (drinking, eating and smoking) of their populations. We find that Belarus and Russian federation are the two countries with the unhealthiest NCD-related lifestyle. With the exception of Canada, the first twenty populations more exposed to the main NCDs preventable risk factors all live in European countries, and mainly in countries of Eastern Europe. Overall, the UBI tends to increase along with the level of human development. In medium, high and very high HDI countries, however, the same level of human development may be associated with very different kinds of NCD-related lifestyles. Finally, economic growth may push populations toward either more unhealthy or healthy habits, depending on the countries’ level of development; the elasticity of unhealthy habits with respect to income per capita is positive (but less than one: on average 0.6) until

A simple framework for analysing the impact of economic growth on non-communicable diseases

30,000, decreases as income rises, and becomes negative (around -0.3) in very high income countries.

Decomposing the Misery Index: A Dynamic Approach

Abstract Non-communicable diseases (NCDs) are currently the leading cause of death worldwide. In this paper, we examine the channels through which economic growth affects NCDs’ epidemiology. Following a production function approach, we develop a basic technique to break up the impact of economic growth on NCDs into three fundamental components: (1) a resource effect; (2) a behaviour effect; and (3) a knowledge effect. We demonstrate that each of these effects can be measured as the product of two elasticities, the output and income elasticity of the three leading factors influencing the frequency of NCDs in any population: health care, health-related behaviours and lifestyle, and medical knowledge.

Simple vs. Complex Carbohydrate Dietary Patterns and the Global Overweight and Obesity Pandemic

Abstract The misery index (the unweighted sum of unemployment and inflation rates) was probably the first attempt to develop a single statistic to measure the level of a population’s economic malaise. In this letter, we develop a dynamic approach to decompose the misery index using two basic relations of modern macroeconomics: the expectations-augmented Phillips curve and Okun’s law. Our reformulation of the misery index is closer in spirit to Okun’s idea. However, we are able to offer an improved version of the index, mainly based on output and unemployment. Specifically, this new Okun’s index measures the level of economic discomfort as a function of three key factors: (1) the misery index in the previous period; (2) the output gap in growth rate terms; and (3) cyclical unemployment. This dynamic approach differs substantially from the standard one utilised to develop the misery index, and allow us to obtain an index with five main interesting features: (1) it focuses on output, unemployment and inflation; (2) it considers only objective variables; (3) it allows a distinction between short-run and long-run phenomena; (4) it places more importance on output and unemployment rather than inflation; and (5) it weights recessions more than expansions.

Leaves and Cigarettes: Modelling the Tobacco Industry

Nowadays, obesity and being overweight are among the major global health concerns. Many, diet-related diseases impose high tangible and intangible costs, and threaten the sustainability of health-care systems worldwide. In this study, we model, at the macroeconomic level, the impact of energy intake from different types of carbohydrates on the population’s BMI (body mass index). We proceed in three steps. First, we develop a framework to analyse both the consumption choices between simple and complex carbohydrates and the effects of these choices on people health conditions. Second, we collect figures for 185 countries (over the period 2012–2014) regarding the shares of simple (sugar and sweetener) and complex (cereal) carbohydrates in each country’s total dietary energy supply. Third, we use regression techniques to: (1) estimate the impact of these shares on the country’s prevalence of obesity and being overweight; (2) compute for each country an indicator of dietary pattern based on the ratio between simple and complex carbohydrates, weighted by their estimated effects on the prevalence of obesity and being overweight; and (3) measure the elasticity of the prevalence of obesity and being overweight with respect to changes in both carbohydrate dietary pattern and income per capita. We find that unhealthy eating habits and the associated prevalence of excessive body fat accumulation tend to behave as a ‘normal good’ in low, medium- and high-HDI (Human Development Index) countries, but as an ‘inferior good’ in very high-HDI countries.

Gender Discrimination, Gender Disparities in Obesity and Human Development

A vast literature analyzed the tobacco industry in the past: however, most of the previous studies dealt with final demand or crop production. Instead, there are only a few works which examined the whole tobacco industry in general, and the Italian and Greek ones in particular. This book aims at filling this gap: this contribution is even more needed if we take into account that tobacco consumption is currently decreasing, but there is the possibility to grow tobacco for other purposes thanks to biotechnologies. In this context, quantitative models of the tobacco industry can be of great help for policy making. To achieve this aim, the book is organized in three parts which describe three quantitative approaches: I. An Econometric Modelling approach. The main advantage of econometric methods is the possibility to submit the models and their results to statistic validation. Moreover, econometric models can be used for simulation and/or forecasting exercises, and their performances can be checked with proper statistical tests, too. The empirical application with Italian tobacco data shows the interesting properties of this methodology in terms of forecasting performances and statistical properties. II. A Linear Programming approach. The Positive Mathematical Programming, or PMP, is a methodology used in this work to simulate the effects of the EU reform scenarios on a sample of Italian farms. The PMP is able to reproduce the economic and production framework of the farms within the sample group, and estimate the future production choices, based on the changes in economic convenience of tobacco crops with respect to possible alternative production activities within the farm. III. An Input-Output Matrix approach. In order to investigate the possible impacts of different scenarios, an Input-Output model at the national and regional level is developed and used. In this way employment, output and household income effects at the national and regional level can be revealed, while a linear programming model helps to identify the impacts on tobacco producing farms and examine the existence of possible alternative cultivation replacements to tobacco. This book can be therefore of interest to both public policy makers, as well as academics and private investors, involved in the tobacco industry.

Pandora box: The eurozone and the euro crisis

Measuring gender inequality and women’s empowerment is essential to understand the determinants of gender gaps, evaluate policies and monitor countries’ progress. With this aim, over the past two decades, research has mainly been directed towards the development of composite indices. The purpose of this paper is to introduce a new and interdisciplinary perspective to the current debate on measuring gender inequality in human development. As a starting point, we develop a simple macroeconomic model of the interdependence between human development and gender inequality. We then introduce a biometric indicator, based on the ratio of female to male body mass index, to measure women’s empowerment at the country level. Finally, by using the latest available data, we examine the ability of this biometric indicator to capture countries’ performance in achieving gender equality. We obtain five main results: 1) we provide a theoretical framework to explain the joint determination of human development and gender inequality; 2) we show how to use this framework to simulate the impact of exogenous shocks or policy changes; 3) we demonstrate that exogenous changes have a direct and a multiplier effect on human development and gender inequality; 4) we find that the distribution of obesity between the female and male populations represents a useful proxy variable for measuring gender equality at the country level; 5) finally, we use these results to integrate and develop existing knowledge on the ‘ecological’ approach to the overweight and obesity pandemic.

Long-Run Macroeconomic Determinants of Cancer Incidence

Abstract The global economy has experienced considerable turbulence since 2007. The financial crisis has been viewed as the trigger for a prolonged period of economic decline. This decline remains an issue for all member states of the European Union, the eurozone and beyond. We argue genesis of this crisis lies in the integration negotiations of 1991, ratified in 1992. These produced a flawed economic model within the eurozone. Given the seeds of decay were planted at origin; we argue the solution can be found through a reconstructed eurozone via looser integration, where countries less equipped to deal with the realities of closer integration will be economically independent.

Economic Growth and the Harmful Effects of Student Loan Debt on Biomedical Research

Abstract: Background: Understanding how cancer incidence evolves during economic growth is useful for forecasting the economic impact of cancerous diseases, and for governing the process of resources allocation in planning health services. We analyse the relationship between economic growth and cancer incidence in order to describe and measure the influence of an increasing real per capita income on the overall rate of cancer incidence. Method:We test the relationship between real per capita income and the overall rate of cancer incidence with a cross-sectional analysis, using data from the World Bank and the World Health Organization databases, for 165 countries in 2008. We measure the elasticity of cancer incidence with respect to per capita income, and we decompose the elasticities coefficients into two components: age-effect and lifestyle-effect. Results: An Engel’s model, in a double-log quadratic specification, explains about half of the variations in the age-standardised rates and nearly two thirds of the variations in the incidence crude rates. All the elasticities of the crude rates are positive, but less than one. The income elasticity of the age-standardised rates are negative in lower income countries, and positive (around 0.25 and 0.32) in upper middle and high income countries, respectively.