Maurizio Pugno

Università degli studi di Cassino e del Lazio Meridionale | UNICAS · Economics and Business Law

Most popular explanations of the happiness paradox cannot fully account for the lack of growth in U.S. reported well-being during the last thirty years (Blanchflower and Oswald (2004)). In this paper we test an alternative hypothesis, namely that the decline in U.S. social capital is responsible for what is left unexplained by previous research. We...

The controversies on the relationship (called ‘gradient’) between the time trend of GDP and of subjective well-being oppose those who claim that the gradient is positive, to those who argue that it is nil. The possible existence of significant changes of the two trends and of the gradient within the same country is a challenge to both views. By foc...

Starting from the mid-1970s and the mid-1990s, Richard Easterlin has provided three key contributions to the development of Happiness Economics. These regard: the existence of the paradox that takes his name, its explanation, and the use of psychological concepts in economics, like happiness and aspirations. Each of these issues is still unresolved...

Sen’s ‘capability approach’ is especially focused on human development as freedom from deprivations, while Scitovsky’s The Joyless Economy is focused on how people can expand their internal capability endogenously by enjoying learning as a socially embedded process. This paper uses the complementarity between the two authors to build a comprehensiv...

The distinction made by the classical economists between necessaries and luxuries is weakened by two problems: how to draw the line between necessaries and luxuries in advanced modern economies; how to evaluate luxuries, whether positively for individual’s freedom and for the economy, or negatively because they appear unethical. This paper examines...

Economic growth has extraordinarily increased the availability of market goods to satisfy people’s need for comfort, but at the same time it has also raised great challenges to their working and family life. Will people learn the skill necessary to cope with these challenges and draw full enjoyment from economic growth? The book explores this quest...

The book provides, at the same time, a theory on ‘human welfare’, a discussion on how it was conceived by Scitovsky and other economists before him, an account of Economics of Happiness from this perspective, and an application to people’s experience of living in competitive market economies. The unifying concept of the book is learning as an enjoy...

International Journal of Happiness and Development, 2(3), 216-230. DOI: 10.1504/IJHD.2015.072187 The capacity to enhance people’s general trust, which is proved to be important for economic growth and individual well-being, is usually attributed to the family and education. This paper first draws attention to two awkward facts: that placing a great...

In the study of human welfare and progress, two prominent approaches stand out, but they appear to have opposite perspectives and even opposite weaknesses. The capability approach (CA), founded by A. Sen, focuses on the objective factors that contribute to human welfare. The happiness approach (HA), initiated by R. Easterlin, focuses on subjective...

Scitovsky is known as a forerunner of behavioural economics simply because he drew heavily on psychology and claimed that people's choices may be 'joyless' (Scitovsky, The joyless economy, 1976). However, a careful reformulation of his analysis shows that he anticipated a number of insights (also with respect to Kahneman's 'two-systems of thought')...

During the last thirty years US citizens experienced, on average, a decline in reported happiness, social connections, and confidence in institutions. We show that a remarkable portion of the decrease in happiness is predicted by the decline in social connections and confidence in institutions. We carry out our investigation in three steps. First,...

Scitovsky's The Joyless Economy is especially well-known in recent economic studies on happiness. However, his insightful contributions have not been taken up as they deserve, mainly because they were, and still are, too original. By reconstructing Scitovsky's analysis on the basis of all his relevant writings, this article integrates his most orig...

Scitovsky laid the foundations for a new theory of people's well-being in his 1976 book The Joyless Economy. This paper, after a reconstruction of Scitovsky's analysis throughout the book and his related writings, shows that supporting evidence can be found in recent economic and psychology literature. Secondly, the paper shows how Scitovsky's theo...

The paper investigates the relation between social capital and life satisfaction focusing on the distinction between bonding and bridging. Using the latest version of the combined World and European Values Surveys, the authors first address the question of measurement of social capital by means of a multi-step factor analysis. Through this procedur...

A matching model will explain both unemployment and economic growth by considering the underground sector and human capital. Three problems can thus be simultaneously accounted for: (i) the persistence of the underground sector, (ii) the ambiguous relationships between underground employment and unemployment, and (iii) between growth and unemployme...

History of Economic Thought and Policy, 2012, n.2, 35-56 Scitovsky laid the foundations for a new theory of people’s well-being in his 1976 book The Joyless Economy. This paper, after a reconstruction of Scitovsky’s analysis throughout the book and his related writings, shows that supporting evidence can be found in recent economic and psychology l...

The recent debate on happiness in economics has revived interest in Scitovsky's 1976 book The Joyless Economy, which aims at explaining the income-happiness paradox, i.e. 'why [American] unprecedented and fast-growing prosperity had left its beneficiaries unsatisfied.' A dynamic economic model will distil Scitovsky's proposal, which has not yet bee...

This chapter argues that the concept of personal autonomy helps explain the gap between economic growth and people’s well-being, which lags behind in many countries, and even slightly declines in the USA. The arguments, based on a variety of specific evidence drawn from psychology, and especially self-determination theory, from economics and sociol...

This paper incorporates tax morale into a search and matching model of equilibrium unemployment, with on-the-job search, extended to both the irregular sector and entrepreneurship. Tax morale is modelled as a social norm for tax compliance which renders evasion costly. The moral cost of tax evasion (the strength of the social norm) is negatively re...

A matching model will explain both unemployment and economic growth by considering the underground sector. Three problems can thus be simultaneously accounted for: (i) the persistence of underground economy, (ii) the ambiguous relationships between underground employment and unemployment, and (iii) between growth and unemployment. The key assumptio...

This paper develops a labour market matching model in order to address the problem of the persistence of the hidden sector and of its regional concentration, as in Italy and in the enlarged Europe. The main novel features of the model are that entrepreneurial ability affects job productivity, and that regular firms receive negative externalities fr...

The empirical evidence from the econometrics of self-reported job satisfaction and from organisational psychology on job performance confronts economic theory with some puzzling results. Job performance is found to be positively correlated with job satisfaction, whereas effort is assumed to be a disutility in the theory. Economic incentives are not...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

Most popular explanations cannot fully account for the declining trend of U.S. reported well-being during the last thirty years. We test the hypothesis that the relationship between social capital and happiness at the individual level accounts for what is left unexplained by previous research. We provide three main findings. First, several indicato...

During the most recent decades people in the US have reported both a stagnant or even declining subjective well-being, as Easterlin (Easterlin, R.A., 1974. Does economic growth improve the human lot? Some empirical evidence. In: David, P.A., Melvin, W.R. (Eds.), Nations and Households in Economic Growth. Academic Press, New York, pp. 89–125) origin...

This paper introduces the concept of self in economics by providing a formalisation of the authoritative approach in empirical psychology called Self-Determination Theory [Deci, E.L., Ryan, R.M., 2000. The "what" and "why" of goal pursuits: human needs and the self-determination of behavior. Psychological Inquiry 11, 227-268]. It shows that the sel...

Self-reported life satisfaction (SRS) in Italy has started to decline well before the current crisis. This paper explores the relationship between SRS and quality of life in Italy, using the ISAE data-base on households. SRS was surveyed on 2000 individuals in May 2008, November 2008 and April 2009. Three main results can be drawn; first, SRS has n...

The recent debate on happiness in economics has revived interest in Scitovsky's 1976-book The Joyless Economy. He anticipated not only the problem, but also the method by drawing heavily for his analysis on psychology. In the book and other related writings, Scitovsky proposed an interesting explanation of the happiness problem. He recognized that...

Af ter years of reforms and unending debate, the question remains unanswered: why is Latin America not growing more? The present article approaches the subject from an unconventional perspective, presenting the persistence of informality as a structural barrier to growth. As an analytical frame of reference, it introduces a 2 x 2 model of growth in...

Tras años de reformas y debates sin fin, sigue sin respuesta la pregunta de por qué América Latina no crece más. El presente artículo aborda el tema desde una perspectiva no convencional. Se presenta la persistencia de la informalidad como una barrera estructural para el crecimiento. Como esquema analítico de referencia, introduce un modelo de crec...

The first aim of the paper is to provide a formal explanation for the happiness paradox, i.e. the fact that well-being in the advanced countries does not increase over time, or even declines, in spite of the rising trend of income, while people continue to strive for money. The second aim is to propose an economic approach which draws from psycholo...

Sen’s capability approach to the assessment of individual well-being and welfare policies, and to the search for theoretical foundations of a paradigm of human development, is challenged by a puzzling fact. In rich countries where material wealth and liberties are at high levels, a significant fraction of the population exhibit malaise in the form...

A general equilibrium model is proposed which assumes that firms hire both official and unregistered labour as imperfect substitutes, and that the efficiency of official labour can be increased by heterogeneous ability of the entrepreneurs and by Marshallian non-linear externalities, i.e., externalities arise if firms are sufficiently numerous. Two...

Psychology has recently attracted renewed attention from economists, since the classical theory of rational choice seems unable to explain various “anomalies” usually observed in human behaviour. In the attempt to depart from Homo Economicus and achieve a more realistic representation of human behaviour, ‘behavioural economics’ proposes the conserv...

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...

“Stagnant services” [Baumol, W.J., Blackman, S.A.B., Wolff, E.N., 1989. Productivity and American Leadership. MIT Press, Cambridge (Mass.)] are characterised by low productivity growth and rising prices, but also, and paradoxically, by output growth proportional to the rest of the economy, and hence by an expanding employment share, with a negative...

Financial investment has become increasingly important on commodity exchanges. This paper distinguishes two types of financial investors and emphasizes differences in their position taking motivation and price impacts. Index traders follow a passive strategy holding virtually only long positions. Money managers trade on both sides of the market and...

This chapter tells a story which has an apparently unfortunate ending. The story concerns a basic, although rather neglected, aspect of Verdoorn’s Law — namely its compatibility with steady-state growth. The story appears to be unfortunate, since the attempts to marry Verdoorn’s Law to the analysis of steady-state growth produce inconsistencies and...

This paper provides an explanation for five stylized facts concerning growth and structural change in the developed economies: (i) the rising share of service employment; (ii) the increase in the female employment rate; (iii) the deceleration of this increase while approaching the male employment rate; (iv) the rising share of female employment wit...

The picture on disparities in productivity growth and in unemployment across European regions reveals the existence of a slow and not very systematic convergence of labor productivity toward a common level, and of an even more uncertain convergence of unemployment rates. This paper uses a unified framework to study both phenomena. We adopt a three-...

A model of allocation of heterogeneous individual ability between rent seeking and productive activity is proposed in order to explain the slow economic growth and high apparent unemployment of Italian Mezzogiorno. Two versions of the model are designed to capture legal rent seeking in the public sector (redundant public employees), and, respective...

This paper provides an explanation of the existence of the black economy, it studies the effects on output of the whole economy, and on unemployment; it also studies the effectiveness of alternative policies to move illegal firms into the official economy. The proposed model assumes heterogeneity in the entrepreneurial ability of individuals, and t...

Financial investment has become increasingly important on commodity exchanges. This paper distinguishes two types of financial investors and emphasizes differences in their position taking motivation and price impacts. Index traders follow a passive strategy holding virtually only long positions. Money managers trade on both sides of the market and...

In the received theory the "natural" rate of growth (Solow) and the "natural" rate of unemployment (Friedman) are independent. Recently, this dichotomy has been reformulated by employing the hypothesis of the trade union. This paper will show, however, that various attempts are emerging in the literature to drop this dichotomy. The key-hypotheses a...

Every scholar of economic growth would acknowledge that Harrod’s contribution to economic dynamics is fundamental. However, when one observes the literature on the topic, the ambiguity with which his work has been received is evident. In fact, once original pieces of analysis are identified in his abundant and informal writings, they have been imme...

Harrod’s analysis of economic dynamics does not consist of a compact and coherent set of statements. It is instead scattered over many writings belonging to different periods of his intellectual life. However, its impact on economists has been great, given its contribution to the birth of macro-dynamics.

This paper presents an export-led model of growth and fluctuations. It explains the growth path of an economy which, having entered the international market with a competitive price level, (i) accelerates economic growth and expands export share in world trade, (ii) approaches a labour shortage that raises wages and worsens both competitiveness and...

This paper tests for structural stability of the Solow growth model, as recently extended to human capital and applied to a large section of countries by Mankiw, Romer and Weil. The evidence is obtained by ranking each explanatory variable of the model in ascending order and then running recursive regressions and by then splitting the original samp...

In the recent literature on economic growth, four approaches compete to explain growth trends in per capita GDP of the world set of countries: (1) the Solovian approach; (2) the New Theory of Endogenous Growth; (3) the Abramovitz–Baumol ‘catching up’ approach; (4) the Kaldor approach of increasing returns and cumulative causation. Approaches (3) an...

Two main perspectives on how an economy grows can be found in economic studies, their explanations centering on either secular trend or business cycle. Recently, a third perspective has developed: that of long waves, i.e. 50-year fluctuations /1/. Whereas empirical research into their existence is still far from being conclusive (see Pugno, 1985a),...

Most popular explanations cannot fully account for the declining trend of US happiness during the last thirty years. We test if the relationship between social capital and happiness at the individual level may account for what is left unexplained by previous research. We provide three findings. First, several indicators of social capital are signif...

This paper compares seven explanations of the socalled 'happiness paradox', which states that self-reported well-being of people living in rich countries does not systematically increase, or it even decreases, during the most re- cent decades. The paradox is strengthened by the evidence on rising psycho- logical problems, on anxiety from time short...

This paper explores life satisfaction in Italy by using the ISAE survey on Italian households’ budget, which has been extended to the specific question on this aspect in the May 2008 wave. Our main new contributions to the existing literature regard the role of the characterisation of the family structure, the type of work, the place of living, the...

The paper proposes a solution to the problem of predicting the qual- ity of social capital, i.e. whether it consists of bonding connections, or whether it includes bridging connections, which are more favourable to social welfare. Social activities are mainly distinguished between intrin- sically motivated activities, where relational goods are enj...