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This paper explore, using Markov switching models, the dynamic relationship between stock market returns and the monetary policy innovation in 11 EUM countries and, for five of them, at each single industry portfolios. It also investigates the possibility of asymmetric effects of the ECB decision when stock markets are not fully integrated. The findings indicate that there is statistically significant relationship between policy innovations and stock markets returns. The findings from country size and industry portfolios indicate that monetary policy has larger asymmetric effect on the industry portfolios of big countries (Italy, France and Germany) compared to the same sectors of small countries (Netherlands and Belgium).

AbstractThe development of effective risk sharing mechanisms is one of the main passages for the success and longevity of a monetary union. In this paper, we study risk sharing, measured as income and consumption smoothing, in the EMU. As we employ time‐varying estimations, we are able to retrieve time patterns of risk sharing for each member country and to compare them with the degree of economic asymmetry within the EMU. Other than documenting the need for stronger risk sharing mechanisms in the EMU, our results also suggest that much more attention should be dedicated to fostering homogeneity in risk sharing across member countries. We document the existence of increasing heterogeneity in the risk sharing capacity between member countries that can potentially exacerbate and amplify the impact of asymmetric shocks and further destabilize the EMU.

This paper investigates the economic and non‐economic determinants of interregional migration for unskilled and skilled migrants in Italy for the period 1985–2006. In addition to the traditional variables of the Harris and Todaro model, we consider the impact of house prices, carbon dioxide emission and crime. Using a dynamic two‐step panel generalized method of moments, the traditional model omits some important variables and may not be representative of migration flow. Our analysis confirms that for different periods we have to take into account different determinants. Moreover, the externalities are significant, indicating the importance of including broader quality of life as explanatory variables.

The EMU assigns a marginal role to economic policy and relies on the idea that, if prices are kept constant, there will be an automatic convergence towards long-run equilibrium income. These beliefs represent the theoretical underpinnings of fiscal and monetary policy strategies in Europe. In order to highlight the weakness of these foundations, this paper evaluates empirically the effects of public expenditure and interest rate setting on equilibrium income in Italy from 1998 to 2008. Our analysis supports the conclusions that government spending has a positive impact on national income while monetary policy strategy has a negative impact. Moreover, the high level of debt does not produce negative effects on GDP. Finally, at a time of financial crisis, these results are reinforced for fiscal policy, but weakened for monetary policy. The paper finally states that the EMU's rigid rules for both fiscal and monetary policy have recessive outcomes.

This paper estimates the pass-through and speed of adjustment of Italian regional interest rates to changes in the money market rate for the period 1998Q1-2009Q4. Our main findings suggest that the markup for the lending rates that banks charge are generally higher in the South than in the North. Moreover, our results indicate that the pass-through tends to be longer in Southern regions. We find little evidence supporting the hypothesis of asymmetric adjustment in the lending rates, but detect some evidence supporting upward rigidity in the regional deposit rates.

This paper estimates the pass-through and speed of adjustment of Italian regional interest rates to changes in the money market rate for the period 1998Q1-2009Q4. Our main findings suggest that the markup for the lending rates that banks charge are generally higher in the South than in the North. Moreover, our results indicate that the pass-through tends to be longer in Southern regions. We find little evidence supporting the hypothesis of asymmetric adjustment in the lending rates, but detect some evidence supporting upward rigidity in the regional deposit rates.

International audience ; The purpose of this paper is to investigate the evidence for economic convergence across Italian regions using trends in interest rate spreads and premia as indicators of regional credit conditions. Our results indicate the presence of persistent interest rate differentials, and thus an absence of convergence across the twenty political regions, but we observe a high degree of convergence within the four macroeconomic areas. On the other hand we find evidence of a strong level of homogeneity in credit conditions within each of the four macroeconomic regions