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This paper considers the effects of central bank independence, labor market institutions and the political partisanship on economic performance. In particular, we test if the partisanship of the government and the degree of central bank independence affect the relationship between labor market institutions and economic performance. We find evidence of interaction effects between the government’s partisanship and the labor market institutions. An increase in union density favors a left-wing government, while an increase in coordination favors a right-wing government. We also find that changes in the partisanship of the government have a larger impact on inflation and unemployment when the labor market is more institutionalized.

European countries have progressively integrated from the point of view of trade and investment and have a common currency now. However, labour market and fiscal institutions have largely retained their national status. The aim of this paper is to examine: a) the possibility for trade unions of internalising external effects stemming from wage setting in a national context; b) the possibility for governments of internalising macroeconomic spillovers deriving from public expenditure at a national level; c) the interactions between fiscal and monetary authorities. We have found a certain gain in terms of employment only when unions cooperate and we are in a regime where the impact of domestic prices on employment through the terms of trade is higher than the impact of domestic prices on employment through the CPI; in this case, a gain in terms also of inflation may take place. In the case of co-operation between governments gains may accrue only in terms of employment or inflation to one or the other country, if the weights put by the governments on price stability are different. This occurs because the central bank, whose overriding objective is price stability, neutralises any rise in the price levels (as well as the positive effects on employment) deriving from the rise in the government expenditures of both countries that take place as a consequence of governments’ co-operation. This paper partially answers recent concern for considering multi-player contexts and asymmetries in open economy analyses. Here, in fact, several kinds of partial coalitions and the effects of asymmetries in players' preferences are studied.

In the recent economic literature the independence of the central bank is often considered to be one of the most effective guarantees to archieve price stability. A strong theoretical basis of this proposition is that the monetary policy delegation given to an independent central bank is an optimal instrument to avoid the time inconsistency problem of monetary policy. This paper investigates the stability properties of this solution in a simple game in which the private sector (i.e. the trade unions) and the public sector (i.e. the dentral bank) simultaneously interact. A representative monopoly union is considered, and – in line with the recent economic debate – two types of unions are investigated: i) the standard micro-founded trade union; ii) the inflation-averse trade union. In both cases, we find that the requirement that the Nash equilibrium be stable imposes a limit to the conservativeness of the central bank. Instability of the nash equilibrium reveals a strategic co-ordination failure between the public and the private sector.

This paper examines the information provided to the private sector by central banks. By using the principal component analysis, we investigated the variance of the procedural rules followed by nine major central banks about informationtreatments. We investigate problems related to the information coming from the central banks by focusing on the quantity and quality perspectives and highlight the methodological complexity of the investigation. We find that a synthetic quantitative index of transparency is not enough to represent the phenomenon since it can result misleading in understanding the behavior of institutionally different central banks associated with the same index values. JEL Codes: D82, E52, E58, PSL Quarterly Review, V. 57, N. 230 (2004)

In Europe, Small and Medium sized Enterprises (SMEs) are allowed to publish their financial statements in an abridged format. One of the main characteristics of the abridged profit and loss account is that disclosure of sales is not mandatory, but is left entirely to the discretion of the SME. In this paper we study the optimal disclosure decision for an SME that is faced with a large competitor, creditors and customers whose actions towards the firm are influenced by the signal they receive. The setup of the model is a duopoly in which one firm, the SME, holds private information about demand. This information can be truthfully disclosed, signalled by sales, or may be kept private. The rivalling firm is a large firm that uses the information to set its profit maximising output. Further, the interest rate charged by the creditors depends on their assessment of the firms financial position, which is influenced by the disclosed information. If the SME depends on only one or a few major customers, disclosing sales may imply giving these customer(s) more bargaining power, which may erode the firms profits. The paper is closely related to the analytical accounting literature that studies voluntary disclosure of value relevant information to investors and the information sharing literature. An important difference between the existing voluntary disclosure literature in accounting and our model is that we do not take capital market reactions into account. The reason for this is straightforward. Firms that publish financial statements in the abridged format are always unlisted firms. Most shareholders of SMEs tend to be closely related to the firm and have access to all relevant information. Moreover, while other voluntary disclosure models tend to restrict the players of the game to the firm and the capital market, who both wish to maximise firm value, on the one hand and a potential entrant on the other hand, we try to take more interested parties into account. This introduces different types of disclosure costs into the model. The information sharing models exclusively focus on the game of competition and usually consider two firms that both have private information. In our model only the SME has private information. The competitor is modelled as a large firm, for which disclosure is mandatory. The conclusions of the model therefore allow us to gain some new insights.

In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among ¯scal and monetary authorities are formed and what are their e®ects on the stabilization of output and price. In particular, our attention is directed to study the consequences on these issues of di®erent institutional contexts in which policy-makers may act. Among other results, we found that, in the presence of externalities, the occurrence of asymmetries is a necessary but not a su±cient condition for cooperation.

The recent economic literature shows a new interest in the links between politics and economics. In this paper, we join Hibbs’ partisanship theory with the literature of fiscal policies international co- ordination. Furthermore, by considering a monetary union context, we also open a new angle of view in the recent debate on the effects of the European Monetary Union. In fact, by considering the possibility of governments’ partisan behaviour, we analyse the possibility for governments of internalising macroeconomic spillovers deriving from public expenditure at a national level and investigate the interactions between fiscal and monetary authorities. This paper also partially answers recent concern for considering multi-player contexts and asymmetries in open economy analyses. Here, in fact, several kinds of co-operation and the effects of asymmetries in players' preferences are studied (e.g. the asymmetries in the governments’ preference due to their partisanship).

This article investigates the consequences on economic performance of the interplay among several political and economic institutions. Our aim is to link the partisan approach with the macroeconomic theory of trade unions. First, by using a simple setup, we are interesting in the comparative effects of left- and right-wing government performance. Second, we aim to analyze the relationship between these effects and different structures of the labor market.