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Posts Tagged ‘Italy’

Italy to Include Prostitution and Illegal Drugs in GDP

Bloomberg reports that Italy will now begin including its shadow economy in the country’s GDP, in an effort to reduce the national deficit:

Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.

Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.




Economists in Charge

We’ve noted in the past that various countries routinely elect economists to be president or prime minister — a trend that has decidedly escaped the U.S.

We also released a podcast a while back called “What Would the World Look Like if Economists Were in Charge?” — which, despite the title, was about the U.S. more than “the world.” (Yes, I am as synecdochically myopic — or is that myopically synecdochal? — as any other American.)

Now, a British reader named Peter Bennett writes in with this challenge:

Looking forward to hearing your take on these new technocratic economists in charge in Italy and Greece.

Just how bad would things have to get in the U.S. before they’d call in the economists?

We will try to scare up a worthy contributor to answer both those questions in the near future.



The Italian Debacle and the "Church of 'Scionology'"

The takeaways from our “Church of ‘Scionology'” radio program were as follows:

+ Economists have found that family firms that pass the company down to the next generation perform worse than if they had brought in professional management.

+ Family firms are particularly dominant in less-developed countries, which tend to have weaker markets and rule of law. Here’s Vikas Mehrotra on that point:

In the developed world, you have good contracting environments, a good system of law enforcement, and so on. So, in the developed world, you can hire professional managers and expect a certain, you know, sticking to the contract law, and so on. It’s rather more difficult to have the same kind of adherence to the rule of law in emerging economies. So, in emerging economies, family firms sort of provide a second-best solution to this poorly developed institutional problem.



A Strange Study on Italian Nepotism

These are dark days for Italy. The country’s bond yields are way up; Prime Minister Silvio Berlusconi looks to be on his way out. And Italian soccer superstar Antonio Cassano is in the hospital recovering from a suspected stroke.

What better time then to blog about a strange new study about Italian nepotism? Authors Ruben Durante, Giovanna Labartino and Roberto Perotti study the effects that a 1998 law decentralizing the hiring process at Italian universities had on levels of nepotism. Pre-1998, candidates for academic positions were selected through a national process. After 1998, however, universities were given the power to hire their own professors. The researchers found that this decentralization led to increased nepotism in areas of “low civic capital,” but not in areas of “high civic capital.”



FREAK-est Links

This week, a new study says materialism ruins marriages; Italian PM Berlusconi thinks drugged-up stock traders cause market volatility; a scientist says memory, not practice, matters for success; does impatience make us fat? Russia’s coming population crisis; and an $18 million sunken treasure.



Italian Seismologists Charged with Manslaughter for Not Predicting Earthquake

In our latest Freakonomics Radio podcast, “The Folly of Prediction,” we talk about the incentives behind making predictions, and how wrong predictions often go unpunished, which is why people make so many of them.
But recent news out of Italy seems to take the premise of punishing bad predictions a bit too far. From the New York Times:

Seven Italian seismologists and scientists went on trial on manslaughter charges on Tuesday, accused of not adequately warning residents of a central Italian region before an earthquake that killed 309 people in April 2009. Prosecutors say that the seven defendants, members of a national panel that assesses major risks, played down the risk of a major earthquake’s occurring even though there had been significant seismic activity near L’Aquila, the capital of the Abruzzo region, in the months before the quake.



What Happens Next as the World Turns Away From Nuclear Power? A Freakonomics Quorum

A few years ago, we wrote a column (related material here) about the unintended consequences of Jane Fonda — that is, how anti-nuclear-power activism as epitomized by Fonda’s character in the nuclear thriller The China Syndrome helped halt the growth of nuclear power in the U.S. The timing of the film couldn’t have been better: 12 days after its release, an accident at the Three Mile Island nuclear plant in Pennsylvania spooked the nation into Fonda’s arms — even though, in retrospect, that accident was far less serious than initially thought.
Many other countries, in the meantime, embraced nuclear power. But if you thought the China Syndrome/Three Mile Island combo was devastating to a nuclear future, consider the aftermath of the Fukushima Daiichi nuclear disaster in Japan. On May 11, Japan announced that it was shelving plans to scale up its nuclear energy capacity. Two weeks later, Germany announced plans to end all nuclear power generation by 2022. The Swiss have vowed to end nuclear power by 2034; and the Italians voted down plans to restart the country’s nuclear power program.



Will Today's Working-age Women Be Tomorrow's Grandparent Baby-Sitters?

A social norm in Italy appears to be grandparents spending the day taking care of their pre-school grandchildren. Even grandfathers can be seen pushing infants around in carriages and entertaining them in public squares, something very rarely seen in the U.S. But social norms don’t just happen—they can be created and later altered by purely economic incentives. Italy has now increased its retirement age substantially, at the same time that the labor-force participation rate of women ages 25-54 has increased by over 20 percentage points. When today’s middle-aged Italian women have grandchildren it is unlikely that they will retire from their long-time careers, and thus unlikely that they will be available to care for grandchildren full time. The social norm of grandparent care is unlikely to exist in Italy in 25 years.



Forget my approach, an even freakier way to measure cocaine use

Our last Freakonomics column was about the indirect approach that Roland Fryer, Paul Heaton, Kevin Murphy, and I used to try to measure crack cocaine use across places and over time in U.S. cities and states. Read all about it here. Some researchers in Italy took a very different, very bizarre approach, as discussed in a British newspaper article reprinted . . .