Carmelo Parello - Academia.edu (original) (raw)
Uploads
Papers by Carmelo Parello
Politica Economica Journal of Economic Policy, Oct 24, 2012
This paper proposes a redemption fund for the euro zone countries alternative to that recently pr... more This paper proposes a redemption fund for the euro zone countries alternative to that recently proposed by Doluca et al. (2012a)-The European Redemption Pact: an Illustrative Guide, GCEE Working Paper No.2, Februaryand in coherence with a previous proposal of one of the author. In doing so, we envisage a country-specific amortization scheme in which the sovereign debts exceeding the 60% ceiling of GDP is redeemed in 30 years. The paper shows that our redemption scheme is cheaper and less constraining than that proposed by Doluca et al. (2012a). Also, our paper shows that fiscal "brakes"such as those required by the Fiscal Compactare not necessary for the complete redemption of the Fund.
Metroeconomica, 2010
In this paper we introduce e¢ ciency-wages unemployment in a model of growth with endogenous tech... more In this paper we introduce e¢ ciency-wages unemployment in a model of growth with endogenous technical change. Our research aim is twofold. On the one hand, we try to provide an analytically tractable model of growth with e¢ ciency-wage unemployment that can be viewed as alternative to the standard models of growth and search-unemployment. On the other, we try to analyze the steady-state e¤ ects of some labor market policies on equilibrium unemployment and long-run economic growth. We …nd that a positive relationship between growth and unemployment exists and that the e¤ ectiveness of any labor market policy aimed at improving the performance of the labor market crucially depends on how individuals discount future income. When consumers are impatient, we …nd that the steady-state impact on economic growth is negative. In contrast, when consumers are patient, the impact on growth becomes positive. In terms of unemployment though, the model is ambiguous and no clear-cut result about its impact on equilibrium unemployment emerges.
Journal of Development Economics, 2008
This paper examines how stronger intellectual property rights (IPR) protection in the south affec... more This paper examines how stronger intellectual property rights (IPR) protection in the south affects the processes of R&D investment, technology transfer and skill accumulation. It finds that stronger IPR protection has only a temporary impact on the innovation rate while it has a negative impact on the long-run imitation rate. In the north, the impact on the process of skill accumulation is negative and increases the within-country wage inequality. In the south, the impact is ambiguous and depends on the externality that skill accumulation generates on the process of education. In addition, the paper shows that skills play a crucial role in attracting FDI inflows, and strengthening IPR protection may be ineffective in attracting technological knowledge when the level of local skill is low.
Economic Modelling, 2009
The influence of the degree of competition in the goods market on growth is analyzed by developin... more The influence of the degree of competition in the goods market on growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1-Lerner index) and depends on both the share of factor inputs in total income and on the elasticity of substitution across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We interpret our results in terms of the interplay between the resource allocation and the profit incentive effects.
Economic Modelling, 2011
Empirical studies investigating the relationship between productivity performance and labor marke... more Empirical studies investigating the relationship between productivity performance and labor market rigidity have generated a negative result. In this paper we try to provide a theoretical explanation for this empirical result. In doing so, we construct a no-shirking model of innovation-based growth and investigate the steadystate impact of a set of active labor market policies aimed at reducing labor market rigidity and knowledge mismatch generated by innovations. We find that, while enhancing job finding activity definitively improves the equilibrium growth-unemployment mix of the economy, reducing the knowledge mismatch of innovation through active measures is less effective in reducing the equilibrium unemployment and improving growth.
In this paper we introduce random quality-jumps in a quality-ladder model without scale effects. ... more In this paper we introduce random quality-jumps in a quality-ladder model without scale effects. Instead of assuming that the size of quality improvements is identical in all the industries, as it is usually assumed by the endogenous growth literature based on R&D, we consider quality improvements of random size. Our modeling strategy is consistent with the empirical evidence regarding the distribution of patent values. We study the normative implications of this model and we show that, even if the long-run growth rate only depends on exogenous parameters as in Segerstrom (1998), the fraction of resources devoted to R&D along the equilibrium-growth path is not optimal. We discuss the optimal policy results with respect to an indicator measuring how dispersed is the distribution of quality jumps.
This paper addresses the analysis of the long-term impact of extending Developed Countries's IP r... more This paper addresses the analysis of the long-term impact of extending Developed Countries's IP rights standards to Developing Countries. To do this, an open economy ladder-quality R&D-based endogenous growth model is constructed where two countries-developed North and developing South-, trade in final goods. Southern firms have a comparative advantage in manufacturing while the North is more productive in conducting innovation. This implies that imitation of the northern firm's products will be a profitable activity for the South. Technology transfer from North to South occurs through trade however, to be effective, technological knowledge must be absorbed and adapted to the South's labs. Imitation is a profit-seeking activity with non-trivial production costs. Once a Southern firm succeeds in imitating the state-of the-art technology of a certain product line, production moves to the South and the former incumbent stops producing that good. The model generates a steady-state growth path where the pace of technological progress is driven only by innovation, and where strengthening IP rights has positive effects on the Southern country, but turns out to have mixed results for both innovation and human capital accumulation in the North.
This paper studies the impact of labor market reforms on growth and unemployment. To do this, a n... more This paper studies the impact of labor market reforms on growth and unemployment. To do this, a no-shirking model of innovation-based growth is constructed, where labor market reforms are mainly aimed at improving job nding rate and increasing unemployment bene t. On a positive standpoint, we nd that there always exists a positive relationship between growth and unemployment. Instead, from a normative standpoint, we nd that the e¤ectiveness of all labor market interventions crucially depend on how individuals discount future income. When consumers are impatient, we nd that improving either labor market performance or unemployment bene t turns out to induce a permanent fall in both the BGP innovation rate and the equilibrium unemployment rate. When consumers are patient, results turn ambiguous with cases in which both growth and unemployment rates might increase. Jel classi cation: O33, O34, J6 Keywords: R&D-based growth, wage rigidities, unemployment. Department of Public Econom...
Journal of Macroeconomics
Journal of Economics
This paper establishes the conditions under which indeterminacy can occur in a Neoclassical growt... more This paper establishes the conditions under which indeterminacy can occur in a Neoclassical growth model with international labor mobility. In the model, workers are supposed to move freely across countries without restrictions, and according to a Harris–Todaro mechanism that makes migration flows sensitive to differences among labor markets conditions. The paper shows that indeterminacy requires the marginal returns to immigrant labor to be diminishing, and no need for productivity externalities at a social level. It also shows that immigration quotas can serve it well to eliminate indeterminacy and stabilize final output.
Macroeconomic Dynamics
This paper presents a Ramsey-like dynamic small open economy with endogenous labor migration. In ... more This paper presents a Ramsey-like dynamic small open economy with endogenous labor migration. In the model, the domestic economy is free to borrow or lend as much as it wants at the given world interest rate, and individuals are supposed to be free to move from a country to another in response to the emergence of a wage differential between countries. Our analysis can be ideally split in two parts. Initially, we propose a baseline model in which only natives are allowed to save and invest in capital assets and traded bonds, whereas immigrants are credit constrained. Next, we provide an extension in which all individuals, including immigrants, have full access to international financial markets. We find that the steady state is always local indeterminate, and that the adjustment dynamics of the competitive equilibrium is dependent upon the initial level of the immigration ratio.
Rivista Di Politica Economica, Aug 1, 2005
This paper addresses the concern of whether the determinants of patent infringement and declarato... more This paper addresses the concern of whether the determinants of patent infringement and declaratory judgement suits may affect both long-term economic performance and wage inequality. In doing so, we construct a quality-ladder R&D-based endogenous growth model, in which the institutional setting for patent protection directly impacts the long-run private incentive to conduct R&D as well as to invest in human
In this paper we study the economic implications of IPR protection on corporate intelligence, R&D... more In this paper we study the economic implications of IPR protection on corporate intelligence, R&D investment and economic growth. To accomplish this objective, we present a dynamic, scale-invariant Schumpeterian model of growth with information gathering and analyze the steady-state e¤ ects of introducing stronger protection for …rms' con…dential information. In doing so, we introduce the trade secret into a standard quality-ladder growth model and study the long-run implications of improving the privacy of …rms' data. We …nd that reducing the set of practices of information gathering is more e¤ ective in protecting …rms' privacy than strengthening trade secret.
Politica Economica Journal of Economic Policy, Oct 24, 2012
This paper proposes a redemption fund for the euro zone countries alternative to that recently pr... more This paper proposes a redemption fund for the euro zone countries alternative to that recently proposed by Doluca et al. (2012a)-The European Redemption Pact: an Illustrative Guide, GCEE Working Paper No.2, Februaryand in coherence with a previous proposal of one of the author. In doing so, we envisage a country-specific amortization scheme in which the sovereign debts exceeding the 60% ceiling of GDP is redeemed in 30 years. The paper shows that our redemption scheme is cheaper and less constraining than that proposed by Doluca et al. (2012a). Also, our paper shows that fiscal "brakes"such as those required by the Fiscal Compactare not necessary for the complete redemption of the Fund.
Metroeconomica, 2010
In this paper we introduce e¢ ciency-wages unemployment in a model of growth with endogenous tech... more In this paper we introduce e¢ ciency-wages unemployment in a model of growth with endogenous technical change. Our research aim is twofold. On the one hand, we try to provide an analytically tractable model of growth with e¢ ciency-wage unemployment that can be viewed as alternative to the standard models of growth and search-unemployment. On the other, we try to analyze the steady-state e¤ ects of some labor market policies on equilibrium unemployment and long-run economic growth. We …nd that a positive relationship between growth and unemployment exists and that the e¤ ectiveness of any labor market policy aimed at improving the performance of the labor market crucially depends on how individuals discount future income. When consumers are impatient, we …nd that the steady-state impact on economic growth is negative. In contrast, when consumers are patient, the impact on growth becomes positive. In terms of unemployment though, the model is ambiguous and no clear-cut result about its impact on equilibrium unemployment emerges.
Journal of Development Economics, 2008
This paper examines how stronger intellectual property rights (IPR) protection in the south affec... more This paper examines how stronger intellectual property rights (IPR) protection in the south affects the processes of R&D investment, technology transfer and skill accumulation. It finds that stronger IPR protection has only a temporary impact on the innovation rate while it has a negative impact on the long-run imitation rate. In the north, the impact on the process of skill accumulation is negative and increases the within-country wage inequality. In the south, the impact is ambiguous and depends on the externality that skill accumulation generates on the process of education. In addition, the paper shows that skills play a crucial role in attracting FDI inflows, and strengthening IPR protection may be ineffective in attracting technological knowledge when the level of local skill is low.
Economic Modelling, 2009
The influence of the degree of competition in the goods market on growth is analyzed by developin... more The influence of the degree of competition in the goods market on growth is analyzed by developing an endogenous growth model with horizontal innovation. Product market competition is measured by (1-Lerner index) and depends on both the share of factor inputs in total income and on the elasticity of substitution across goods. We find that the shape of the relationship between competition and growth can change dramatically according to which proxy of competition is used. We interpret our results in terms of the interplay between the resource allocation and the profit incentive effects.
Economic Modelling, 2011
Empirical studies investigating the relationship between productivity performance and labor marke... more Empirical studies investigating the relationship between productivity performance and labor market rigidity have generated a negative result. In this paper we try to provide a theoretical explanation for this empirical result. In doing so, we construct a no-shirking model of innovation-based growth and investigate the steadystate impact of a set of active labor market policies aimed at reducing labor market rigidity and knowledge mismatch generated by innovations. We find that, while enhancing job finding activity definitively improves the equilibrium growth-unemployment mix of the economy, reducing the knowledge mismatch of innovation through active measures is less effective in reducing the equilibrium unemployment and improving growth.
In this paper we introduce random quality-jumps in a quality-ladder model without scale effects. ... more In this paper we introduce random quality-jumps in a quality-ladder model without scale effects. Instead of assuming that the size of quality improvements is identical in all the industries, as it is usually assumed by the endogenous growth literature based on R&D, we consider quality improvements of random size. Our modeling strategy is consistent with the empirical evidence regarding the distribution of patent values. We study the normative implications of this model and we show that, even if the long-run growth rate only depends on exogenous parameters as in Segerstrom (1998), the fraction of resources devoted to R&D along the equilibrium-growth path is not optimal. We discuss the optimal policy results with respect to an indicator measuring how dispersed is the distribution of quality jumps.
This paper addresses the analysis of the long-term impact of extending Developed Countries's IP r... more This paper addresses the analysis of the long-term impact of extending Developed Countries's IP rights standards to Developing Countries. To do this, an open economy ladder-quality R&D-based endogenous growth model is constructed where two countries-developed North and developing South-, trade in final goods. Southern firms have a comparative advantage in manufacturing while the North is more productive in conducting innovation. This implies that imitation of the northern firm's products will be a profitable activity for the South. Technology transfer from North to South occurs through trade however, to be effective, technological knowledge must be absorbed and adapted to the South's labs. Imitation is a profit-seeking activity with non-trivial production costs. Once a Southern firm succeeds in imitating the state-of the-art technology of a certain product line, production moves to the South and the former incumbent stops producing that good. The model generates a steady-state growth path where the pace of technological progress is driven only by innovation, and where strengthening IP rights has positive effects on the Southern country, but turns out to have mixed results for both innovation and human capital accumulation in the North.
This paper studies the impact of labor market reforms on growth and unemployment. To do this, a n... more This paper studies the impact of labor market reforms on growth and unemployment. To do this, a no-shirking model of innovation-based growth is constructed, where labor market reforms are mainly aimed at improving job nding rate and increasing unemployment bene t. On a positive standpoint, we nd that there always exists a positive relationship between growth and unemployment. Instead, from a normative standpoint, we nd that the e¤ectiveness of all labor market interventions crucially depend on how individuals discount future income. When consumers are impatient, we nd that improving either labor market performance or unemployment bene t turns out to induce a permanent fall in both the BGP innovation rate and the equilibrium unemployment rate. When consumers are patient, results turn ambiguous with cases in which both growth and unemployment rates might increase. Jel classi cation: O33, O34, J6 Keywords: R&D-based growth, wage rigidities, unemployment. Department of Public Econom...
Journal of Macroeconomics
Journal of Economics
This paper establishes the conditions under which indeterminacy can occur in a Neoclassical growt... more This paper establishes the conditions under which indeterminacy can occur in a Neoclassical growth model with international labor mobility. In the model, workers are supposed to move freely across countries without restrictions, and according to a Harris–Todaro mechanism that makes migration flows sensitive to differences among labor markets conditions. The paper shows that indeterminacy requires the marginal returns to immigrant labor to be diminishing, and no need for productivity externalities at a social level. It also shows that immigration quotas can serve it well to eliminate indeterminacy and stabilize final output.
Macroeconomic Dynamics
This paper presents a Ramsey-like dynamic small open economy with endogenous labor migration. In ... more This paper presents a Ramsey-like dynamic small open economy with endogenous labor migration. In the model, the domestic economy is free to borrow or lend as much as it wants at the given world interest rate, and individuals are supposed to be free to move from a country to another in response to the emergence of a wage differential between countries. Our analysis can be ideally split in two parts. Initially, we propose a baseline model in which only natives are allowed to save and invest in capital assets and traded bonds, whereas immigrants are credit constrained. Next, we provide an extension in which all individuals, including immigrants, have full access to international financial markets. We find that the steady state is always local indeterminate, and that the adjustment dynamics of the competitive equilibrium is dependent upon the initial level of the immigration ratio.
Rivista Di Politica Economica, Aug 1, 2005
This paper addresses the concern of whether the determinants of patent infringement and declarato... more This paper addresses the concern of whether the determinants of patent infringement and declaratory judgement suits may affect both long-term economic performance and wage inequality. In doing so, we construct a quality-ladder R&D-based endogenous growth model, in which the institutional setting for patent protection directly impacts the long-run private incentive to conduct R&D as well as to invest in human
In this paper we study the economic implications of IPR protection on corporate intelligence, R&D... more In this paper we study the economic implications of IPR protection on corporate intelligence, R&D investment and economic growth. To accomplish this objective, we present a dynamic, scale-invariant Schumpeterian model of growth with information gathering and analyze the steady-state e¤ ects of introducing stronger protection for …rms' con…dential information. In doing so, we introduce the trade secret into a standard quality-ladder growth model and study the long-run implications of improving the privacy of …rms' data. We …nd that reducing the set of practices of information gathering is more e¤ ective in protecting …rms' privacy than strengthening trade secret.