In a simple stochastic overlapping generation model, individuals work when young and retire when old, generations’ productivity is affected by a serially uncorrelated random shock, and fiat money and nominal public debt are the only storable assets. In this setting, we show that social...

The design of fully funded pension plans is affected by governance and incentive problems, as underlined by the experience of several countries. The analytic perspective of contract theory allows to detect the nature of such problems: pension-fund managers have strong incentives to manipulate...

This paper estimates Taylor rules featuring instabilities in policy parameters, switches in policy shocks' volatility, and time-varying trend inflation using post-WWII U.S. data. The model embedding the stochastic target performs better in terms of data-fit and identification of the changes in...

We analyze the optimality of alternative mechanisms of public provision of private goods affecting the productive capacity of households (e.g. education, health-care) rather than directly their welfare. Opting out mechanisms - often considered a tool to focus social expenditure - are proven to...

The relationship between fiscal and financial euro area indicators and sovereign yield spreads has changed after the start of the financial crisis. Increased financial volatility has magnified the impact of fiscal conditions as drivers of sovereign risk, has widened the set of macroeconomic...

The economic literature on PPPs has generally overlooked agency problems within private consortia. We provide a first contribution in this direction, relying on a simple incomplete contracts framework where a Builder and an Operator set up a Special Purpose Vehicle (SPV) to carry out a contract...

L’articolo si prefigge di analizzare l’evoluzione, a cavallo degli ultimi anni di crisi, dell’intervento pubblico a supporto del capitale di rischio tramite strumenti innovativi di partnership con operatori privati. L’intervento pubblico origina da fallimenti del mercato del capitale di...

New opportunities and risks arise from the growing role of Italian local governments as public debt issuers on credit and financial markets. The paper analyzes the present institutional framework, and characterizes a reform implementing a stable and efficient "market" for the Italian local...

In many countries, pension funds based on individual accounts have been affected by high operating costs. Contract theory helps to unravel the nature of such problems: managers of pension funds have strong incentives to manipulate market expectations about their capacity through wasteful...