Andrea Fracasso

Università degli Studi di Trento | UNITN · Department of Economics and Management

Departing from the usual tenets of proportionality between cross-border trade flows and knowledge spillovers, we investigate whether relatively intense trade relationships are associated with particularly large international R&D spillovers. A nonlinear specification nesting the hypothesis of global and trade-unrelated R&D spillovers is estimated on...

After addressing definitional issues on the concepts of concentration and specialization, the paper reviews the justifications for and the interpretation of some indicators of localization economies used in the empirical literature on agglomeration economies: specialization indexes and location quotients. A simulation exercise shows under what cond...

Criticism of economic globalization and technological progress has gained support in Italy in the last two decades. However, due to the differentiated exposure of local labor markets to this process, electoral outcomes have varied considerably across the country. By observing the local impact of three global economic phenomena (flows of migrants, f...

Italy was among the first countries to introduce drastic measures to reduce individual mobility in order to slow the diffusion of COVID-19. The first measures imposed by the central authorities on March 8, 2020, were unanticipated and highly localized, focusing on 26 provinces. Additional nationwide measures were imposed after one day, and were rem...

Purpose This work analyses how the adoption of technological innovations correlates with workers' perceived levels of job insecurity, and what factors moderate such relationship. Design/methodology/approach The study makes use of the 2018 wave of the Participation, Labour, Unemployment Survey (PLUS) from Inapp. The richness of the survey and the r...

This work sheds light on how firm- and entrepreneur-specific attributes covariate with Chinese private firms’ growth rates before and during the global financial crisis. In order to do so, we exploit the exceptional presence of data regarding the firms’ sales over the previous three years in the 2010 China Private Enterprises Survey. Firms run by e...

This paper contributes to the literature on firms’ export pricing by assessing whether and to what extent firms take into account the expected future evolution of the exchange rates while setting their prices. Using French micro-level trade data, our empirical analysis reveals that by adjusting their export prices, firms partly absorb information a...

We examine the role of inflation expectations in conditioning monetary policy, addressing three of its facets. The first concerns the channels through which inflation expectations impinge upon actual inflation, and their policy implications. The second facet regards the technical and empirical issues involved in keeping track of inflation expectati...

We analyse how the adoption of technological innovations correlates with workers' perceived levels of job insecurity, and what factors mediate such relationship, by exploiting a recent, large and dedicated survey distributed to a representative sample of Italian workers. The dedicated survey allows us to look at both cognitive and affective job ins...

This work investigates the cross-industry relationship between robot adoption and the risk of contracting COVID-19 in the workplace in Italy. Using a novel dataset on the risk of workplace contagion, we show that industries employing more robots tend to exhibit lower risks, thereby providing some empirical support for the widely held, but so far un...

We present a review of the channels through which the US fiscal and monetary post-pandemic policies may affect the euro area. US spillovers will likely be relevant and worth considering while setting the policy stance in the euro area, at a crossroad between economic global recovery and global overheating. A key role is going to be played by global...

In the post-COVID environment, the ECB might face many and related trade-offs associated with the risk of being dominated by policy concerns other than price stability. Most of these risks could be reduced by a revision of the euro area governance framework, the creation of a new mechanism to provide financial assistance, and the implementation of...

Italy was among the first countries to introduce drastic measures to reduce mobility in order to prevent the diffusion of Covid-19. On March 9, 26 out of 111 provinces were subject to severe limitations on individual mobility between municipalities. One day later, new restrictive measures were introduced in the whole country with no regional distin...

This document was requested by the European Parliament's Committee on Economic and Monetary Affairs. Monetary Dialogue Papers, September 2020 https://www.europarl.europa.eu/committees/en/econ/econ-policies/monetary-dialogue

The rapid and dramatic diffusion of the Covid-19 epidemic in Italy was tackled by the Italian government with social distancing measures and with the suspension of all economic activities, except "essential" sectors. A lively policy debate on more refined criteria to choose what activities to allow and to suspend in the future led INAIL (National I...

Very heterogeneous patterns of firm employment growth characterize the Chinese provinces, suggesting the existence of a relationship between these and regional factors. This empirical work explores this topic by providing novel evidence of the role played by regional institutional and regional factors in firm employment growth in China during the d...

We study whether and to what extent the electoral dynamics in Italy over the 1994–2008 period can be explained by the development of economic factors associated with globalization. To measure the level of exposure to globalization for local labor markets, our main unit of analysis, we use the intensity of import competition from China and the prese...

This paper tackles the relationship between structural reforms, policy inertia and agents’ expectations. By means of a stylized small-open economy encompassing barriers to entry in the non-tradable sector and political constraints’ associated with the risk of political instability in a context of heterogeneous agents (rentiers and non-rentiers), we...

This work illustrates the nature of the core/periphery imbalances and anaemic long-run growth in the Euro area and discusses the problems associated with addressing them through expansionary fiscal policies in the core regions and greater domestic expenditures in unreformed peripheral areas. As competitiveness imbalances across regions have widened...

Trade in oil has undergone significant changes in the last 20 years: technical progress has allowed the exploitation of new and previously untapped fields; the emergence of new large oil importers, such as China, has shifted the traditional patterns of demand and supply, while the desire to diversify energy sources has favored the emergence of new...

The recent debate on the reform of the economic governance in the euro area has been marred by a stark disagreement on the correct sequence between risk-reduction (responsibility) and risk-sharing (solidarity). In fact, the dichotomy between risk-reduction and risk-sharing may be fallacious as they reinforce each other, particularly in a monetary u...

The paper aims at assessing the impact of the extractiveness of institutions on the size of the informal economy. After the identification of the variables suitable to proxy the distinct features of institutions, among which their extractiveness, the paper offers a battery of cross-section regressions over two large samples of developed and develop...

We study whether and to what extent the electoral dynamics in Italy over the 1994-2008 period can be explained by the development of economic factors associated with globalization. To measure the level of exposure to globalization for local labor markets, our main unit of analysis, we use the intensity of import competition from China and the prese...

The rapid economic development in China has been characterized by levels of productivity very heterogeneous across local areas. This work investigates a previously unexplored aspect of such heterogeneity by assessing the degree of within-industry allocative efficiency across provinces over the period 1998-2007. Using firm-level data on the Chinese...

We carry out a firm-level empirical analysis to evaluate the economic impact of the sequence of earthquakes occurred in 2012 in the Italian region of Emilia-Romagna, and to address the question of whether the localization of a firm within an industrial district mitigated or exacerbated this impact. We estimate the effect of the earthquake on firms...

The paper investigates how the topological features of the virtual water (VW) network and the size of the associated VW flows are likely to change over time, under different socio-economic and climate scenarios. We combine two alternative models of network formation –a stochastic and a fitness model, used to describe the structure of VW flows- with...

his paper illustrates the nature of the core/periphery imbalances and anemic long-run growth in the Euro area. It discusses the problems associated with addressing them through expansionary fiscal policies in the core regions and greater domestic expenditure in unreformed peripheral areas. As competitiveness imbalances across regions have widened,...

Sharp regional differences in income and consumption patterns have characterized the Chinese development process. Focusing on the years 2007 and 2012, this work employs the Oaxaca-Blinder decomposition to assess the extent and the determinants of the urban/non-urban and coastal/inland disparity in consumption patterns. The analysis shows that the a...

Long-term inflation expectations in the euro area remained well anchored during the global financial crisis and were therefore insensitive to the arrival of economic news. This article investigates the behaviour of expectations in the euro area during the most recent period and finds evidence that the de-anchoring of expectations started in Decembe...

There is a widespread consensus that China needs to rebalance its export-driven growth paradigm towards a more consumption-based one and that such process is to be accompanied by the transition towards the renminbi's full convertibility. However, the Chinese authorities have so far acted with great caution because this transition cannot but acceler...

This paper looks into the recent experience of Greece and addresses why Greece has so far failed to put in place the social and economic changes necessary to resume growth. Economic and institutional features of the country as well as social values and cultural factors play a role in the judgement about such failure. Each of them needs to be consid...

DEM Discussion Paper 2015/07, Università degli Studi di Trento

This work addresses the implications of agents’ expectations about structural reforms in a context characterized by institutional inertia. By means of a stylized small-open economy model encompassing policy-induced barriers to entry in the non-tradable sector, the paper shows that expectations about reforms affect economic performances and alter th...

This work investigates the systemic factors behind cross-country variability in the transnational media coverage of foreign news in the EU in 2010. Using a large dataset on the transnational coverage of news by 148 EU national media, the paper maps the network of EU transnational citations and performs a quantitative assessment of their systemic de...

The aim of the paper is to investigate the main determinants of the bilateral virtual water (water used in the production of a commodity or service) flows associated with international trade in agricultural goods across the Mediterranean basin. We consider the bilateral gross flows of virtual water in the area and study what export-specific and imp...

Data used in Fracasso, Grassano & Vittucci Marzetti (2014, The gravity of foreign news coverage in the EU: does the euro matter?, JCMS: Journal of Common Market Studies, forthcoming). Excel file.

Paradoxically, the fact that financial markets believed that real convergence between the Euro periphery and Euro core would have occurred as a consequence of the Euro led to real divergence and external imbalances within the Eurozone. After the outbreak of the European debt crisis, austerity policies in the peripheral countries of the Eurozone sim...

Network data used in Fracasso, Grassano & Vittucci Marzetti (2014, The gravity of foreign news coverage in the EU: does the euro matter?, JCMS: Journal of Common Market Studies, forthcoming). Pajek net file. The (x,y) coordinates of the nodes are the capital city coordinates of the correspondent country. The weights attached to the links are citati...

This work investigates the determinants of virtual water trade (VWT) flows by means of an estimated gravity model of trade applied to the virtual water embodied in the agricultural goods exchanged across countries. In line with the recent literature on the gravity model, the paper presents a battery of estimation methods: cross-section and panel, O...

The paper analyzes the nonlinearities in the impact of localization, diversity, urbanization and competition on firm-level TFP, using a large sample of Italian firms from 1999 to 2007. We adopt a Panel Smooth Transition Regression model, so that the TFP elasticities are free to vary smoothly across two or more extreme values. Results show that loca...

We investigate how a country’s absorptive capacity and relative backwardness affect the impact of international R&D spillovers on domestic Total Factor Productivity (TFP). To account for nonlinearities, we adopt a Panel Smooth Transition Regression approach, where a country’s TFP elasticity to the foreign R&D stock is allowed to change smoothly acr...

The large current account imbalances in the eurozone reflect persistent diverging trends between core and periphery countries, also fed by low interest rates and abundant capital flows brought about by the introduction of the euro. With the global financial crisis, the market sentiment has changed, and capital has left the periphery countries suffe...

Whether international R&D spillovers are global and trade-related is still a debated issue. By adopting two specifications that nest models previously estimated in the literature, we test the hypothesis that international R&D spillovers are global and trade-unrelated for a sample of OECD countries over the period 1971–2004. In particular, via a ran...

We develop a two-country two-period model able to reproduce the key qualitative aspects of the US-China co-dependency (and imbalances) as the result of the Chinese and American authorities pursuing different but complementary objectives. We show that a mercantilist reserve hoarding has served well the Chinese policy goals (fast GDP expansion and la...

We present a two-country two-stage growth model capturing several salient features of the special US–China relationship and reproducing the process of export-led growth and structural change in China. In phase 1, China accumulates and sterilizes US assets (and finances US consumption) as it pegs the renminbi to the dollar at an undervalued level, t...

Section 2 of the paper describes some peculiar features of the German socio-economic model and argues that there is a widespread consent in Germany on preserving it in the face of global, European and national challenges. Essential components of this model are the export-oriented manufacturing sectors. Painful reforms were implemented in the first...

The first part of this paper describes some peculiar features of the German socio-economic model and argues that there is a widespread consent in Germany on preserving it in the face of global, European and national challenges. Essential components of this model are the export-oriented manufacturing sectors specialized in the production of those ca...

The global crisis has revived the growth-rebalancing debate, backing the position of those advocating a fast reduction of the imbalances between the US and China. By means of a two-country two-stage growth model reproducing the main qualitative features of the Sino-American co-dependency, we analyze alternative (medium- and long-term) scenarios for...

Following Coe and Helpman (International R&D Spillovers, EER, 39, 859-887, 1995), the literature on the trade-related channels of international knowledge flows has flourished. Departing from Coe and Helpman’s tenets on the proportionality of trade and productivity spillovers and thus relaxing the implicit assumption that the knowledge transferred i...

In a much cited paper, Wolfgang Keller (Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners, European Economic Review, 48, 1469-1481, 1998) claims that international R&D spillovers are global and trade-unrelated. In following works, Keller revisits his position and maintains that spillovers are...

The estimation of monetary policy rules suggests that the interest rates set by central banks move with a certain inertia. Although a number of hypotheses have been suggested to explain this phenomenon, its ultimate origin is unclear, thus delineating this issue as a modern "puzzle" in monetary economics. We show that household's preferences can pl...

This paper investigates policy deviations from linear Taylor rules motivated by the risk management approach followed by the Fed during the Greenspan era. We estimate a nonlinear monetary policy rule via a logistic smoothing transition regression model where policy-makers' judgment, proxied by economically meaningful variables, drives the transitio...

It has been argued that China may stop financing the US external deficit, appreciate the currency, increase consumption and move its economy away from tradables and towards nontradables. Our two-country model shows that paradoxically this policy option is unattractive if the US authorities keep monetary policy sufficiently loose, thus reducing the...

The crisis of 2008 has shown the unsustainability of the global imbalances centered on the US-China symbiotic relationship that characterized the previous decade. This has revived the so-called growth-rebalancing debate. In particular, the new emerging consensus calls for a re-orientation of the US economy away from consumption and toward exports,...

The WTO Dispute Settlement System (DSS) has been the object of many studies in politics, law, and economics focusing on institutional design problems. This paper contributes to such studies by accounting for the argumentative nature and sophisticated features of the DSS through a philosophical analysis of the procedures through which it is articula...

The crisis of 2008 has shown the unsustainability of the global imbalances centered on the USChina symbiotic relationship that characterized the previous decade. This has revived the so-called growth-rebalancing debate. In particular, the new emerging consensus calls for a re-orientation of the US economy away from consumption and toward exports, a...

The global crisis burst in 2007 has revived the growth-rebalancing debate and backed the position of those advocating a fast reduction of the global imbalances centered on the symbiotic US-China relationship. In this work, we develop a two-country two-stage growth model reproducing the main features of the Sino-American co-dependency and we analyze...

The persistence of global imbalances remains a potential source of instability for the international economic system, which ought to be tackled in order to exit from the current crisis in a better position. This paper shows that the complexity of the global network of trade imbalances has increased over time in terms of the number of countries invo...

The estimation of monetary policy rules suggests that the interest rates set by central banks move with a certain inertia. Although a number of hypotheses have been suggested to explain this phenomenon, its ultimate origin is unclear, thus delineating this issue as a modern "puzzle" in monetary economics. We show that household's preferences can pl...

We examine whether the spread of an exporting strategy can be characterized as a diffusion process using a general framework that accounts for attrition and changes in the pool of potential adopters and allows the diffusion rate to vary according to firm and market characteristics. Our findings indicate that the diffusion of exporting is described...

We examine whether the spread of an exporting strategy can be characterized as a diffusion process using a general framework that accounts for attrition and changes in the pool of potential adopters and allows the diffusion rate to vary according to firm and market characteristics. Our findings indicate that the diffusion of exporting is described...

We examine whether the spread of an exporting strategy can be characterized as a diffusion process using a general framework that accounts for attrition and changes in the pool of potential adopters and allows the diffusion rate to vary according to firm and market characteristics. Our findings indicate that the diffusion of exporting is described...

This paper examines the relative importance of global and domestic factors as a source of macroeconomic fluctuations in Brazil from 1995 to 2004. US and Brazilian credit spreads are encompassed in a near-VAR model, including the main debt-related domestic variables. The US corporate bond spread is used as a measure of international risk aversion. T...

Modern monetary policymakers consider a huge amount of information to evaluate events and contingencies. Yet most research on monetary policy relies on simple instrument rules and one relevant underpinning for this choice is the good empirical fit of the Taylor rule. This paper challenges the solidness of this foundation. We investigate the way the...

Recent work on monetary policy design has investigated the interactions between labor market institutions and monetary policies and their implications for macroeconomic performance. This paper argues that this link is not independent of the fiscal policymaking structure.

This paper addresses the issue of a coordinated adjustment plan (“new Plaza") to close global imbalances. We show that the complexity of the network of bilateral trade imbalances has increased, revealing that any plan focusing on industrialised countries only is likely to be ineffective. By proposing new effective exchange rate measures based on bi...