Siavash Mohades

Information on capacity utilisation is central to studying firms’ investment behaviour. We develop a framework in which firms operating at high capacity utilisation must invest to maintain a capacity buffer against future shocks. Using data from the Bank of Italy’s Survey of Industrial and Service Firms, we examine how deviations from firms’ capacity targets relate to investment and how this relationship varies with uncertainty and financial constraints. Firms operating at their growth window invest more in productive capacity. Higher uncertainty has little effect on investment among firms at high capacity utilisation but increases investment among firms operating below capacity, pointing to a potential misallocation channel through which uncertainty affects firms differently according to their operational position.

Ageing is central to economic and social policy, yet there is no widely accepted, operational definition of ageing. This paper proposes a broad, intuitive and testable definition based on two axiomatic conditions: monotonicity and inevitability. These require that ageing variables deteriorate in expectation over long horizons, while allowing for short-run reversals, and that deterioration becomes increasingly certain as the time horizon expands. We formulate these conditions at the individual, cohort and population levels and derive hypothesis tests to assess whether observed variables satisfy them. We apply this framework to panel data from the Survey of Health, Ageing and Retirement in Europe and the English Longitudinal Study of Ageing, using a continuous-time Ornstein–Uhlenbeck process that allows for persistence and potential non-stationarity. Variables that appear to reflect ageing at the population level may not do so at the individual level. Moreover, most heterogeneity in later-life outcomes is unrelated to ageing and instead reflects differences established earlier in life. Even when variables satisfy the proposed ageing conditions, they are generally not invertible, implying that measures of “biological age” can be highly misleading.

This paper examines Phelps’ structuralist claim that asset valuation affects unemployment through investment. Using quarterly UK data, it tests whether changes in the FTSE 100 precede labour-market adjustment. Stock-market growth predicts subsequent changes in unemployment, whereas unemployment has little predictive power for the stock market. Positive valuation shocks are followed by lower unemployment, with investment providing the clearest transmission channel. Evidence in levels indicates a gradual employment response consistent with adjustment in business assets.

This paper studies how political incentives in fiscal policy can generate public debt accumulation within a currency union. We develop a two-country currency-union model in which governments share a common monetary authority but differ in their fiscal objectives: one government maximises household welfare, while the other also values incumbent political support. This political objective shifts spending towards targeted transfers and away from broad public goods, weakening the primary balance and raising debt even without default risk, financial panic or large cross-country spillovers. Euro-area government finance and cabinet data are used to discipline the fiscal margins underlying the mechanism and to show that the model operates at empirically plausible scales. The results identify a fiscal-composition channel of debt accumulation: political pressure raises debt by changing what governments spend on, not only how much they spend.

This paper investigates whether investments in data affect firms’ R&D and whether the two are productivity-enhancing complements. We conceptualise and test whether investments in data reduce market uncertainty, thereby mitigating the inherent uncertainty of R&D and enhancing research and innovation investment. Using Italian firm-level data from 2002 to 2024 and exploiting the GDPR as an instrument, we identify a positive causal effect of data on R&D investment. Moreover, we find that data and R&D are complementary in enhancing both short- and long-term productivity. Our analyses also identify a positive role for R&D in productivity only when firms are data-intensive.

We introduce a method for measuring economic uncertainty at the firm, sector and aggregate levels using sales volatility and validate it against existing macroeconomic uncertainty measures. We use firm-level Compustat data to construct uncertainty measures for the US economy. The results show that macroeconomic conditions are the predominant source of firms’ uncertainty, while firm characteristics generate substantial heterogeneity across businesses. The findings highlight the importance of accounting for firm and sectoral heterogeneity when studying uncertainty and its effects on economic activity.