Gianluca Cafiso

Rose effect versus border effect: the Euro's impact on trade

The purpose of this article is to test the common finding of a positive ‘Rose Effect’ (RE) in the case of the Euro through a comparison with an indicator of integration among the Euro Zone (EZ) countries: the ‘Border Effect’ (BE). This study of the Euros impact using both the RE and the BE is a novelty in the literature. Our findings cast doubts about the supposed trade-costs reduction caused by the Euro, reduction which is the main explanation of the positive RE estimated in several works. Both indicators are estimated by means of a gravity model for bilateral trade flows using a panel of manufacture exports and production figures.

A Guide to Public Debt Equations

This document is a practical guide to the main equations describing and related to Public Debt. We derive all the equations presented and highlight their mathematical meaning. An application of these equations is in Cafiso (2012) for some EU countries.This is the 3rd version of this document (November 2012). The main novelty with respect to the previuos version (January 2012) is the introduction of section 3 which considers the case of foreign-currency denominated debt.

Evidence on Fiscal Consolidations and the Evolution of Public Debt in Europe

The objective of this paper is to gain insights into the relationship between deficit-reducing policies and the evolution of the debt/GDP ratio. We consider past events of fiscal consolidation in a selected group of EU countries, by using the new data set recently made available by Devries et al. (2011), and check what is the associated change of the debt/GDP ratio both from a short and medium-term perspective. Our results show that a favourable short-term response emerges in the majority of the countries considered, while the medium-term one is adverse for all. The analysis provides information to assess the convenience of deficit-reducing policies to contain or invert the evolution of the debt/GDP ratio.

Non‐residents’ Holdings, Market Volatility and Public Debt Sustainability. An Analysis with Data for Italy

Non‐residents’ holdings (NRH) of debt securities have been large in euro area countries, but during the euro area debt crisis some of those countries experienced a steep contraction of such holdings. The analysis aims to provide a data‐founded explanation of what is behind the decrease observed in 2011 by testing two alternative hypotheses. At the same time, we discuss how that decrease might have endangered the sustainability of public debt and study the empirical relevance of the most important of those processes. The topics presented refer to any advanced economy, but we check the hypotheses discussed by taking Italy as a case study because of data constraints. Italy is an interesting country to consider since it is a very large debt issuer. Our results point towards the importance of market volatility to explain variations of NRH, but those holdings do not seem to influence debt sustainability.

The Economic Impact of Legislation. An Historical Analysis of Italy from the Creation of the Kingdom of Italy to the End of the Second World War

This paper aims to evaluate the economic impact of legislation from the creation of the Kingdom of Italy in 1861 to the end of World War II. This historical analysis attempts to prove that the process of institutional unification of the states that existed before the creation of the Kingdom of Italy had a positive impact on the growth of the Italian GDP, due to the fact that legislative uniformity helped to simplify economic exchange and development, by establishing certain rules over the entire territory of the Kingdom, instead of the piecemeal legislation existent prior to unification.

The economic impact of legislation and litigation on growth: a historical analysis of Italy from its unification to World War II

This paper aims to evaluate the impact of Italys unification on its economic growth from 1861 to the outbreak of World War II. This historical analysis attempts to prove that the process of legislative harmonization intrinsic to the unification had a positive effect on Italys GDP because legislative uniformity facilitates economic transactions. Moreover a uniform and more effective legislation would have caused less litigation and therefore favoured economic growth, thanks to smoother relations between economic agents.