Gianluigi Pelloni

Rural entrepreneurs and institutional assistance: an empirical study from mountainous Italy

Despite the recognition of entrepreneurship as one of the main determinants of rural economic development, empirical research in this field is relatively sparse. Thus, there is little evidence on the role and function of rural entrepreneurs, the driving force behind the birth, survival and growth of rural enterprises. The present work aims at providing a contribution to filling this gap in knowledge. We present and analyse the results emerging from a questionnaire submitted to a sample of 123 rural entrepreneurs and businesses in a mountainous area of central Italy. In particular, we test for six hypotheses concerning the correlation between different factors, reflecting entrepreneur and business-specific characteristics, and the adoption of instruments of institutional assistance. Entrepreneurs and businesss variables are related to (1) entrepreneurial human capital; (2) entrepreneurs local knowledge and social capital; (3) firms size; (4) entrepreneurs age; (5) firms age; and (6) business sector of activity. Empirical results largely support the importance of variables taken into consideration in explaining differences in the adoption of institutional assistance among businesses of the sample. In the light of our empirical findings, we also examine and propose potential policies for fostering entrepreneurship and the development of the rural region under study.

Non-Linearity in the Canadian and US Labour Markets: Univariate and Multivariate Evidence from A Battery of Tests

The non-linearity of macroeconomic processes is becoming an increasingly important issue both at theoretical and empirical level. This trend holds for labour market variables as well. Reallocation theory of unemployment relies on non-linearities. At the same time there is mounting empirical evidence of business cycles asymmetries. Thus the assumption of linearity /non-linearity becomes crucial for the corroboration of labour market theories. This paper turns on the microscope on the assumption of linearity and investigates the presence of asymmetries on aggregate and disaggregate labour market variables. The assumption of linearity is tested using five statistical tests for the US and Canadian unemployment rates, growth rates of the employment sectoral shares of construction, finance, manufacturing and trade sectors. An AR(p) model was used to remove any linear structure from the series. Evidence of non-linearity is found for the sectoral shares with all five statistical tests in the US case but not in the aggregate level. The results for Canada are not clear-cut. Evidence of unspecified non-linearity is found in the unemployment rate and in the sectoral shares. Overall important asymmetries are found in disaggregated labour market variables in the univariate setting. The linearity hypothesis was also examined in a multivariate framework. Evidence is provided that important asymmetries exist and a linear VAR cannot capture the dynamics of employment reallocation.

Testing for non-linearity in labour markets: the case of Germany and the UK

Abstract The assumption of linearity is tested using five statistical tests for the German and the UK unemployment rate and for employment sectoral shares growth rates from the two countries. An AR( p ) model was used to remove any linear structure from the series. Evidence in favour of non-linearity was found in the German labour market but this was not the case in the UK where in most cases the assumption of linearity was accepted. The evidence illustrates the different behaviour of the labour markets in the UK and Germany. The policy maker needs to take into account the asymmetries that exist in the growth rates of employment sectoral shares when employment forecasts are generated and policies are decided.

Cyclical unemployment and sectoral shifts: Further tests of the Lilien hypothesis for the UK

Abstract The sectoral shifts hypothesis and related implications are analysed using UK data within a consistent econometric framework, with sensitivity analyses based on the concept of extreme bounds being carried out in order to assess the robustness of the results obtained.

Macroeconomic Effects of Sectoral Shocksin Germany, The U.K. and, The U.S.: A VAR-GARCH-M Approach

A VAR-GARCH-M model for aggregate employment and employment shares isdeveloped to explore the macroeconomic effects of sectoral shocks. Using U.S.,U.K. and German data, three main issues are investigated: the relevance ofshocks volatility; the amount of aggregate employment growth variationaccounted for by re-allocation shocks and the amount of aggregate innovation volatility explained by sectoral components. Bayesian methods are used for estimation model selection and innovation accounting – Bayes factors for model selection and MCMC for estimation. The results favor the VAR-GARCH-M model. A significant GARCH-M component indicates the presence of volatility clustering and the feedback of volatilities on aggregate employment and sectoral shares growth rates. The innovation analysis supports sectoral shocks as a triggering force for aggregate employment fluctuations. In all three countries, 45% to 55% ofaggregate employment variation is accounted for by sectoral innovations.

De Finetti, Friedman, and the methodology of positive economics

Abstract Friedmans philosophical view has been the object of several, sometimes contradictory, interpretations. Whatever the interpretation, a specific aspect of Friedmans methodological and epistemological framework has been overlooked: Friedmans adherence to the neo-Bayesian interpretation of probability and induction. This paper, by rectifying this oversight, claims that Friedmans instrumentalism was a pioneering attempt to introduce a blend of positivism, pragmatism, and ‘radical probabilism’ into economic analysis. From this angle Friedmans philosophical work emerges as a contribution to the debate over the ontological status of scientific entities and theories as well as to the methodology of economics.

Unemployment Fluctuations in the UK: 1958-92

This paper presents estimates of a reduced-form unemployment equation for the UK using annual data from 1958 to 1992. It extends previous work by using modern time series econometrics, by focusing on variables that bring about fluctuations around the natural rate as well as variables that determine it, and by using a measure of sectoral reallocation purged of demand influences. The resulting equation has stable parameters which are readily interpretable in terms of the underlying theories of unemployment fluctuations.

Employment Reallocation and Unemployment Revisited: A Quantile Regression Approach

This study revisits the sectoral shifts hypothesis for the US for the period 1948 to 2011. A quantile regression approach is employed in order to investigate the asymmetric nature of the relationship between sectoral employment and unemployment. Significant asymmetries emerge. Lilien’s dispersion index is significant only for relatively high levels of unemployment and becomes insignificant for low levels suggesting that reallocation affects unemployment only when the latter is high. More job reallocation is associated with higher unemployment.

Regional And Sectoral Evidence Of The Macroeconomic Effects Of Labor Reallocation: A Panel Data Analysis

This paper re-examines Lilien’s sectoral shifts hypothesis for U.S. unemployment. We employ a monthly panel that spans from 1990:01 to 2011:12 for 48 U.S. states. Panel unit root tests that allow for crosssectional dependence reveal the stationarity of unemployment. Within a framework that takes into account dynamics, parameter heterogeneity and cross-sectional dependence in the panel, we show that sectoral reallocation is significant not only at the aggregate level but also at the state level. The magnitude and the statistical significance of the latter as measured by Lilien’s index increases when both heterogeneity and cross-sectional dependence are taken into account.

De Finetti’s Probabilistic Approach and the Theory of Expectations in Economics

The rational expectations revolution has re-proposed the necessity of a deeper analysis of the role expectations play in economic model building. It would be an “intellectual fraud” to claim that the expectations controversy” was triggered by the debate generated by the rational expectations hypothesis. The beginning of such a controversy can be located in the 20’s and 30’s with the issue of the works of Keynes, Knight and of the Austrian and Swedish schools.