by Mordecai Kurz
Today’s demand for social insurance is supported by economic reasoning showing that private
insurance markets do not provide efficient coverage for medical insurance, for inter-generational risk
sharing and for income instability. It is unfashionable to say but government intervention in these
areas is the solution and Conservative economic ideology is the problem. Hence, policy in the 21th
century will focus on publically managed social insurance. In studying the problem of Social Security,
I show it arises from changing demography which generated a deficit. Study of proposed solutions
lead me to four conclusiones: (i) Privatization of Social Security is infeasible since system has
a «Legacy Debt» of $11.6 trillion. (ii) Proposals to privatize Social Security are ideologically motivated
and offer no real solution. (iii) Privatization is undesirable since it is not optimal to rely entirely
on the markets to determine retirees’ incomes. Volatility of financial markets will result in unacceptable
inter-generational income inequality.
by Stefano Pareglio, Marco Grasso
The aim of this paper is to outline the role of instrumental freedoms and institutions in the
achievement of sustainable human development, doing so according to the perspective of Sen’s
capability approach. Each area of sustainability can be represented by a set of driving forces,
response variables and state variables. State variables denote constitutive freedoms, the achieved
functionings chosen from the capability set. Their variations are produced by driving force variables.
The latter are, in their turn, influenced by response variables triggered by institutions and
instrumental freedoms. We map a selected set of variables related to the environmental dimension in
order to show how instrumental freedoms and institutions influence sustainable human development.
by Cristiano Perugini, Gaetano Martino
The paper aims at analyzing organizational issues in the supply of safe food. The relationship
between organizational form and level of safety does not seem, satisfactorily or systematically, to
have attracted researchers’ attention. The study of the influence of the characteristics of safe food is
here developed within the theoretical framework provided by Transaction Costs Economics. Behavioural
uncertainty and asset specificity are taken into account in order to analyze the influence of
the characteristics of food on the choice of the structure of governance. The paper proposes the idea
the hybrid forms are efficiently chosen by agents and preliminary empirical evidence is provided.
The study thus provides necessary premises to develop the analysis both of liability and competition
within complex relationships along supply chain.
by Giovanni Verga, Pietro A. Vagliasindi, Pasquale Cirillo
Recent economic literature indicates that imperfections in the credit market can amplify business
fluctuations causing financial fragility. Starting from the framework of Greenwald and Stiglitz
(1993) and Delli Gatti et al. (2005), we make a more careful model of the banking sector in Italy
and its impact on firms’ investment behaviour in an economic model with heterogeneous agents.
We focus on the productive sector, considering mainly risk neutral firms, facing capital increasing
adjustment costs. One of our aims is to comprehensively examine all incomes from capital in a static
equilibrium, in order to consider the corporate and individual levels in a unitary framework. In doing
so, we take a first step towards building an operational micro-simulation model, which will allow us
to replicate the main empirical evidence of the credit market and provide useful and concrete policy
recommendations on monetary and fiscal systems and policies.