Mauro Napoletano - Academia.edu (original) (raw)
Papers by Mauro Napoletano
Games and Economic Behavior, 2012
We investigate the efficiency and stability of R&D networks in a model with network-dependent ind... more We investigate the efficiency and stability of R&D networks in a model with network-dependent indirect spillovers. We show that the efficient network structure critically depends on the marginal cost of R&D collaborations. When the marginal cost is low, the complete graph is efficient, while high marginal costs imply that the efficient network is asymmetric and has a nested structure. Regarding
Harberger's "A Vision of the Growth Process", Presidential Address at the 1998 Annu... more Harberger's "A Vision of the Growth Process", Presidential Address at the 1998 Annual Meeting of the American Economic Association, provides evidence that contributions to aggregate real cost reduction (RCR) are concentrated in a small number of industries. According to Harberger, this is because the effect of broad externalities - such as those linked to the growth of the total stock
This paper employs a homogenous firms' database to investigate industry localiza- tion in Eur... more This paper employs a homogenous firms' database to investigate industry localiza- tion in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Over- man index (Duranton and Overman, 2005). We find that, independently from the
This paper shows that the available stylized facts on productivity dynamics, such as persistent c... more This paper shows that the available stylized facts on productivity dynamics, such as persistent cross-sectoral heterogeneity, do not allow to solve an identification problem regarding the impact of common drivers - such as General Purpose Technologies (GPTs) - on economic growth. The evidence of persistently heterogeneous productivity performances is consistent both with a GPT-driven model, and with a model characterized
In this work we analyze the short-and long-run effects of fiscal austerity policies, employing an... more In this work we analyze the short-and long-run effects of fiscal austerity policies, employing an agent-based model populated by heterogeneous, boundedly-rational firms and banks. The model, in line with the family of "Keynes+Schumpeter" formalism, is able to account for a wide array of macro and micro empirical regularities. In particular, it endogenously generates self-sustained growth patterns together with persistent economic fluctuations punctuated by deep downturns. On the policy side, we find that austerity policies considerably harm the economy, by increasing output volatility, unemployment, and the incidence of crises. In addition, they depress innovation and the diffusion of new technologies, thus reducing long-run productivity and GDP growth. Finally, we show that "discipline-guided" fiscal rules are self-defeating, as they do not stabilize public finances, but, on the contrary, they disrupt them.
SSRN Electronic Journal, 2000
This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010(K+S, cf. Dosi ... more This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010(K+S, cf. Dosi et al, , 2013(K+S, cf. Dosi et al, , 2014) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) and Keynesian (demand-related) policies in ensuring that the economic system follows a path of sustained stable growth and employment.
SSRN Electronic Journal, 2000
ABSTRACT What is the most appropriate combination of fiscal and monetary policies in economies su... more ABSTRACT What is the most appropriate combination of fiscal and monetary policies in economies subject to banking crises and deep recessions? We study this issue using an agent-based model that is able to reproduce a wide array of macro and micro empirical regularities. Simulation results suggest that policy mixes associating unconstrained, counter-cyclical fiscal policy and monetary policy targeting employment is required to stabilize the economy. We also show that “discipline-guided” fiscal rules can be self-defeating, as they depress the economy without improving public finances. Finally, we find that the effects of monetary and fiscal policies become sharper as the level of income inequality increases.
SSRN Electronic Journal, 2000
We build an agent-based model to study how the interplay between low-and highfrequency trading af... more We build an agent-based model to study how the interplay between low-and highfrequency trading affects asset price dynamics. Our main goal is to investigate whether high-frequency trading exacerbates market volatility and generates flash crashes. In the model, low-frequency agents adopt trading rules based on chronological time and can switch between fundamentalist and chartist strategies. On the contrary, high-frequency traders activation is event-driven and depends on price fluctuations. High-frequency traders use directional strategies to exploit market information produced by low-frequency traders. Monte-Carlo simulations reveal that the model replicates the main stylized facts of financial markets. Furthermore, we find that the presence of high-frequency trading increases market volatility and plays a fundamental role in the generation of flash crashes. The emergence of flash crashes is explained by two salient characteristics of high-frequency traders, i.e., their ability to i) generate high bid-ask spreads and ii) synchronize on the sell side of the limit order book. Finally, we find that higher rates of order cancellation by high-frequency traders increase the incidence of flash crashes but reduce their duration.
Networks and Heterogeneous Media, 2008
We investigate some of the properties and extensions of a dynamic innovation network model recent... more We investigate some of the properties and extensions of a dynamic innovation network model recently introduced in [36]. In the model, the set of efficient graphs ranges, depending on the cost for maintaining a link, from the complete graph to the (quasi-) star, varying within a well defined class of graphs. However, the interplay between dynamics on the nodes and topology of the network leads to equilibrium networks which are typically not efficient and are characterized, as observed in empirical studies of R&D networks, by sparseness, presence of clusters and heterogeneity of degree. In this paper, we analyze the relation between the growth rate of the knowledge stock of the agents from R&D collaborations and the properties of the adjacency matrix associated with the network of collaborations. By means of computer simulations we further investigate how the equilibrium network is affected by increasing the evaluation time τ over which agents evaluate whether to maintain a link or not. We show that only if τ is long enough, efficient networks can be obtained by the selfish link formation process of agents, otherwise the equilibrium network is inefficient. This work should assist in building a theoretical framework of R&D networks from which policies can be derived that aim at fostering efficient innovation networks. See http://www.sg.ethz.ch for more information nodes in fact represent agents that form or delete links with other agents, based on the utility that those links may provide to them .
Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D ne... more Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D networks in a large number of economic sectors over a long time period . Our main goal is to evaluate temporal and sectoral robustness of the main statistical properties of empirical R&D networks. By studying a large set of indicators, we provide a more complete description of these networks with respect to the existing literature. We find that most network properties are invariant across pooled and sectoral networks. This result suggests the presence of universal laws governing the dynamics of R&D networks. Moreover, we find that many properties of R&D networks are characterized by a non-monotonic trend with a peak in the mid-nineties. This allows us to define the mid-nineties as a "Golden Age" characterized by the rise-and-fall of R&D networks. Finally, we show that many properties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation.
Regional Studies, 2013
This paper employs a homogenous firms database to investigate industry localization in European c... more This paper employs a homogenous firms database to investigate industry localization in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Overman index . We find that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we find that the two indices significantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a crosssectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly "traditional" sectors (like jewelery, wine, and textiles) and sectors where scale economies are important. However, once one controls for countries' industrial structures science-based sectors turn out to be the most localized ones.
Games and Economic Behavior, 2012
We investigate the efficiency and stability of R&D networks in a model with network-dependent ind... more We investigate the efficiency and stability of R&D networks in a model with network-dependent indirect spillovers. We show that the efficient network structure critically depends on the marginal cost of R&D collaborations. When the marginal cost is low, the complete graph is efficient, while high marginal costs imply that the efficient network is asymmetric and has a nested structure. Regarding
Harberger's "A Vision of the Growth Process", Presidential Address at the 1998 Annu... more Harberger's "A Vision of the Growth Process", Presidential Address at the 1998 Annual Meeting of the American Economic Association, provides evidence that contributions to aggregate real cost reduction (RCR) are concentrated in a small number of industries. According to Harberger, this is because the effect of broad externalities - such as those linked to the growth of the total stock
This paper employs a homogenous firms' database to investigate industry localiza- tion in Eur... more This paper employs a homogenous firms' database to investigate industry localiza- tion in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Over- man index (Duranton and Overman, 2005). We find that, independently from the
This paper shows that the available stylized facts on productivity dynamics, such as persistent c... more This paper shows that the available stylized facts on productivity dynamics, such as persistent cross-sectoral heterogeneity, do not allow to solve an identification problem regarding the impact of common drivers - such as General Purpose Technologies (GPTs) - on economic growth. The evidence of persistently heterogeneous productivity performances is consistent both with a GPT-driven model, and with a model characterized
In this work we analyze the short-and long-run effects of fiscal austerity policies, employing an... more In this work we analyze the short-and long-run effects of fiscal austerity policies, employing an agent-based model populated by heterogeneous, boundedly-rational firms and banks. The model, in line with the family of "Keynes+Schumpeter" formalism, is able to account for a wide array of macro and micro empirical regularities. In particular, it endogenously generates self-sustained growth patterns together with persistent economic fluctuations punctuated by deep downturns. On the policy side, we find that austerity policies considerably harm the economy, by increasing output volatility, unemployment, and the incidence of crises. In addition, they depress innovation and the diffusion of new technologies, thus reducing long-run productivity and GDP growth. Finally, we show that "discipline-guided" fiscal rules are self-defeating, as they do not stabilize public finances, but, on the contrary, they disrupt them.
SSRN Electronic Journal, 2000
This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010(K+S, cf. Dosi ... more This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010(K+S, cf. Dosi et al, , 2013(K+S, cf. Dosi et al, , 2014) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) and Keynesian (demand-related) policies in ensuring that the economic system follows a path of sustained stable growth and employment.
SSRN Electronic Journal, 2000
ABSTRACT What is the most appropriate combination of fiscal and monetary policies in economies su... more ABSTRACT What is the most appropriate combination of fiscal and monetary policies in economies subject to banking crises and deep recessions? We study this issue using an agent-based model that is able to reproduce a wide array of macro and micro empirical regularities. Simulation results suggest that policy mixes associating unconstrained, counter-cyclical fiscal policy and monetary policy targeting employment is required to stabilize the economy. We also show that “discipline-guided” fiscal rules can be self-defeating, as they depress the economy without improving public finances. Finally, we find that the effects of monetary and fiscal policies become sharper as the level of income inequality increases.
SSRN Electronic Journal, 2000
We build an agent-based model to study how the interplay between low-and highfrequency trading af... more We build an agent-based model to study how the interplay between low-and highfrequency trading affects asset price dynamics. Our main goal is to investigate whether high-frequency trading exacerbates market volatility and generates flash crashes. In the model, low-frequency agents adopt trading rules based on chronological time and can switch between fundamentalist and chartist strategies. On the contrary, high-frequency traders activation is event-driven and depends on price fluctuations. High-frequency traders use directional strategies to exploit market information produced by low-frequency traders. Monte-Carlo simulations reveal that the model replicates the main stylized facts of financial markets. Furthermore, we find that the presence of high-frequency trading increases market volatility and plays a fundamental role in the generation of flash crashes. The emergence of flash crashes is explained by two salient characteristics of high-frequency traders, i.e., their ability to i) generate high bid-ask spreads and ii) synchronize on the sell side of the limit order book. Finally, we find that higher rates of order cancellation by high-frequency traders increase the incidence of flash crashes but reduce their duration.
Networks and Heterogeneous Media, 2008
We investigate some of the properties and extensions of a dynamic innovation network model recent... more We investigate some of the properties and extensions of a dynamic innovation network model recently introduced in [36]. In the model, the set of efficient graphs ranges, depending on the cost for maintaining a link, from the complete graph to the (quasi-) star, varying within a well defined class of graphs. However, the interplay between dynamics on the nodes and topology of the network leads to equilibrium networks which are typically not efficient and are characterized, as observed in empirical studies of R&D networks, by sparseness, presence of clusters and heterogeneity of degree. In this paper, we analyze the relation between the growth rate of the knowledge stock of the agents from R&D collaborations and the properties of the adjacency matrix associated with the network of collaborations. By means of computer simulations we further investigate how the equilibrium network is affected by increasing the evaluation time τ over which agents evaluate whether to maintain a link or not. We show that only if τ is long enough, efficient networks can be obtained by the selfish link formation process of agents, otherwise the equilibrium network is inefficient. This work should assist in building a theoretical framework of R&D networks from which policies can be derived that aim at fostering efficient innovation networks. See http://www.sg.ethz.ch for more information nodes in fact represent agents that form or delete links with other agents, based on the utility that those links may provide to them .
Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D ne... more Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D networks in a large number of economic sectors over a long time period . Our main goal is to evaluate temporal and sectoral robustness of the main statistical properties of empirical R&D networks. By studying a large set of indicators, we provide a more complete description of these networks with respect to the existing literature. We find that most network properties are invariant across pooled and sectoral networks. This result suggests the presence of universal laws governing the dynamics of R&D networks. Moreover, we find that many properties of R&D networks are characterized by a non-monotonic trend with a peak in the mid-nineties. This allows us to define the mid-nineties as a "Golden Age" characterized by the rise-and-fall of R&D networks. Finally, we show that many properties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation.
Regional Studies, 2013
This paper employs a homogenous firms database to investigate industry localization in European c... more This paper employs a homogenous firms database to investigate industry localization in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Overman index . We find that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we find that the two indices significantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a crosssectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly "traditional" sectors (like jewelery, wine, and textiles) and sectors where scale economies are important. However, once one controls for countries' industrial structures science-based sectors turn out to be the most localized ones.