Inequality of opportunity in the credit market

Credit market imperfections can prevent the poor from making pro table investments. Under asymmetric information observable features, such as wealth and collateral, play an important role in determining who gets credit, in violation of the Equality of Opportunity principle. We de ne equality of opportunity as the equal possibility of getting credit for a given aversion to e¤ort. We rst establish that, due to larger cross subsidization in high collateral classes of borrowers, richer individuals are more likely to get credit for a given aversion to e¤ort. Our second result is that Inequality of Opportunity is associated with an ine¢ cient allocation of resources among classes of borrowers. The marginal borrower in classes that post more collateral exerts less e¤ort in equilibrium (and therefore produces lower aggregate surplus) than the marginal borrower in lower collateral classes. This suggests that public credit policies should be targeted at poorer classes of would be borrowers both for equity and e¢ ciency reasons, which rarely occurs in practice.equality of opportunity; credit; moral hazard; cross subsidization; collateral.

Inequality of Opportunity in the Credit Market

Credit market imperfections can prevent the poor from making profitable investments. Under asymmetric information observable features, such as wealth and collateral, play an important role in determining who gets credit, in violation of the Equality of Opportunity principle. We define equality of opportunity as the equal possibility of getting credit for a given aversion to effort. We first establish that, due to larger cross subsidization in high collateral classes of borrow- ers, richer individuals are more likely to get credit for a given aversion to effort. Our second result is that Inequality of Opportunity is associated with an inefficient allocation of resources among classes of borrowers. The marginal borrower in classes that post more collateral exerts less effort in equilibrium (and therefore produces lower aggregate surplus) than the marginal borrower in lower collateral classes. This suggests that public credit policies should be targeted at poorer classes of would be borrowers both for equity and efficiency reasons, which rarely occurs in practice.equality of opportunity; credit; moral hazard; crosssubsidization; collateral

Wealth inequality, unequal opportunities and inefficient credit market

This paper investigates the impact of heterogeneous wealth on credit allocation from an egalitarian opportunity and an efficiency point of view. Under asymmetric information on both wealth and the responsibility variable there is no trade-off between equality and efficiency, actually wealth inequality delivers both inequality of opportunity and inefficiency. Due to decreasing absolute risk aversion, poor entrepreneurs, other things equal, realize better projects. This notwithstanding, due to the bidimensional hidden information, they may be rationed out or obtain a loan only at the cost of cross subsidizing bad projects realized by rich entrepreneurs. In the first case inefficiency arises in the form of insufficient investment, in the second in the form of inefficient projects being realized. An egalitarian redistribution of endowments may lead to perfect screening, no inefficiencies in the allocation of credit and equality of opportunity

Evaluating administrative burdens through SCM: some indications from the Italian experience

A methodology to measure administrative burdens, based on the Dutch Standard Cost Model (SCM), has been applied in a large number of European countries, coupled in most cases with the commitment to a reduction target. This paper compares the application of the method in different national context and discusses its weaknesses and strengths against more complete forms of evaluation of the adequacy of regulation. The paper also discusses some indication arisen during the measurement of administrative burdens through SCM in Italy. Our main conclusion is that the SCM is a potentially useful tool and could provide motivation for culture change in policymaking. Its major strength, which lies mainly in its pragmatic approach and the possibility of commitment on a quantitative target, may be at the same time a source of weakness and may deliver some misleading results. Also some basic concepts of the model need a more rigorous definition to be consistently applied in different countries.administrative burdens; better regulation; costs of regulation; European governance; standard cost model

Take the money and run: making profits by paying borrowers to stay home

Can a bank increase its profit by subsidizing inactivity? This paper suggests this may occur, due to the presence of hidden information, in a monopolistic credit market. Rather than offering credit in a pooling contract, a monopolist bank can sort borrowers through an appropriate subsidy to inactivity. Under some conditions, sorting may avoid the collapse of the market and increases the welfare of everybody. The bank increases its profits, good borrowers benefit from lower interest rates and bad potential borrowers from the subsidy. The subsidy policy however implies a cross subsidy between contracts and this is possible only under monopoly

Systematic Review of Robotic Nephrectomy for Kidney Cancer

Robotic nephrectomy has become an increasingly preferred surgical technique for managing renal cell carcinoma (RCC). This review aims to sys-tematically evaluate existing literature on the safety, efficacy, clinical outcomes, and associated costs of robotic nephrectomy, especially in relation to tumor dimensions and other pertinent patient factors. Following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, we performed an extensive literature search across major databases (PubMed, Scopus, and Cochrane Library) from incep-tion to October 2023. The inclusion criteria encompassed randomized controlled trials (RCTs), cohort studies, and case-control studies that compared robotic nephrectomy with open or laparoscopic nephrectomy. Outcomes analyzed included operative time, intraoperative blood loss, complication rates, length of hospital stay, oncological outcomes, and cost-effectiveness. The Egger test was used to assess publication bias. The review incorporated 30 studies involving 5,432 patients who underwent robotic nephrectomy. Key findings indicated that robotic nephrectomy resulted in significantly reduced intraoperative blood loss (mean difference of −85 mL; p < 0.001) and shorter hospital stays (mean difference of −1.3 days). Tumor size had a notable impact on surgical outcomes, with larger tumors (≥7 cm) being associated with prolonged operative times and slightly higher complication rates. Robotic nephrectomy was also associated with higher costs compared to conventional surgical techniques; however, reduced readmission rates offset some of these costs. Oncological outcomes for robotic nephrectomy were comparable to those of open nephrectomy. Robotic nephrectomy is a safe and effective approach for kidney cancer that demonstrates advantages in perioperative recovery and surgical precision, particularly for smaller tumors. While costs may be higher, the clinical benefits and potential long-term savings from decreased postoperative complications recommend its use. Further high-quality RCTs are essential to validate these findings

Kiinan talouskasvun hidastuminen ja keskituloansa

Tutkielma on teoreettinen kirjallisuuskatsaus, jossa käsitellään Kiinan talouskasvua taloudellisen kehityksen, kasvun ja konvergenssin teorioiden kautta. Lisäksi tutkielmassa käsitellään keskituloansaa ja tekijöitä, jotka voivat ajaa Kiinan keskituloansaan. Keskituloansa on tilanne, jossa keskitulotasoinen maa ei voi enää kilpailla matalan tuottavuuden aloilla matalamman palkkatason maiden kanssa. Samalla maan instituutiot ja taloudelliset fundamentit eivät ole riittävän kehittyneitä, jotta maa voisi ylläpitää talouskasvuaan kasvattamalla kokonaistuottavuuttaan kehittyneiden maiden tavoin. Kasvun hidastuessa maa jää suhteellisen stagnaation tilaan ja lakkaa konvergoimasta kehittyneiden maiden kanssa. Tutkimusten mukaan keskitulotasoiset maat kokevat poikkeuksellisen korkealla todennäköisyydellä hidastuneen talouskasvun jaksoja. Keskitulotason maiden talouskasvu on epävakaata, koska niiden instituutiot ovat kehittymättömiä. Eteneminen ylemmälle tulotasolle vaatii rakennemuutoksia, jotka ovat poliittisesti hankalia toteuttaa. Esimerkiksi valtaapitävien intressit voivat estää maata toteuttamasta tarpeellisia rakennemuutoksia ja näin ajaa maan keskituloansaan. Kiinan teollisuussektorin reaalipalkat ovat 14-kertaistuneet vuosien 1980 ja 2015 välillä. Kiinan ikääntyvä väestö ja vuodesta 2012 alkaen supistunut työvoima ovat kasvattaneet palkkojen nousupainetta edelleen. Keskituloansan näkökulmasta Kiinan kyvykkyys kilpailla matalan tuottavuuden aloilla on heikentynyt ja paine siirtyä innovaatiokeskeiseen kasvustrategiaan kasvaa. Kiinan BKT:n kasvua ajavat edelleen raskaat investoinnit kiinteistösektorille ja infrastruktuuriin, vaikka näillä sektoreilla on ylikapasiteettia ja pääoman tuotto on laskenut. Vuonna 2009 aloitettu elvytyspolitiikka on kasvattanut Kiinan yrityslainakantaa nopeasti ja johtanut varjopankkisektorin kasvuun. Talouskasvu on ollut nopeaa, mutta kiinalaiset instituutiot ovat vielä kehittymättömät. Tähän mennessä ei ole näkynyt merkkejä Kiinan aidosta siirtymästä kohti "uutta normaalia" eli kestävää, mutta matalampaa talouskasvua. On Kiinan kommunistisen puolueen intressien mukaista, että talous kasvaa nykyistä vauhtia vähintään vuoteen 2020 asti. Näin Kommunistisen puolueen 18. puoluekokouksessa antama lupaus BKT:n kaksinkertaistamisesta aikavälillä 2010-2020 pitää ja Kiina saavuttaa "kohtalaisen hyvinvoinnin". Tutkielmani mukaan Kiinan talouskasvua uhkaa erinäiset kriisit joiden syveneminen voi ajaa Kiinan keskituloansaan

Mezzogiorno: una sfida possibile senza miracoli

Questo articolo discute le ragioni della fragilità dell'economia del Mezzogiorno prima della grande crisi e l'aggravamento del divario negli anni 2008-14. Si dimostra che l'ulteriore divaricazione tra aree del paese non è un destino ineluttabile. Una strategia di politica industriale semplice e mirata alla minimizzazione delle intermediazioni clientelari ha dato risultati positivi nel triennio 2015-7. Per il futuro tuttavia una significativa convergenza si potrà concretizzare solo a fronte di una ripresa di investimenti pubblici e privati in capitale fisico ed umano per i quali si esaminano alcune ipotesi concrete

Semantic interference mechanisms on long-term visual memory and their eye-movement signatures in mild cognitive impairment

Objective: Long-term visual memory representations degrade as a function of semantic interference, as measured by recognition performance, and their strength is related to eye-movement responses. Even though clinical research has examined interference mechanisms in pathological cognitive ageing and explored the diagnostic potential of eye-movements in this context, little is known about their interaction in long-term visual memory. Method: An eye-tracking study compared a Mild Cognitive Impaired group with healthy controls. Participants watched a stream of 129 naturalistic images from different semantic categories, presented at different frequencies (1, 6, 12, 24) to induce semantic interference (SI), then asked in a 2-Alternative Forced Choice paradigm to verbally recognize the scene they remembered (old/novel). Results: Recognition accuracy of both groups was negatively impacted by SI, especially in the healthy controls. A wider distribution of overt attention across the scene predicted better recognition, especially by the MCI participants, although these fixation patterns were influenced by SI. MCI compensated the detrimental effect of SI by focusing overt attention during encoding and so accrue distinctive details of the scene, while they widened it during recognition to boost retrieval. Independently of the group: (a) the re-instatement of fixations indicated a more successful recall and increased as a function of SI; and (b) attending visually salient regions negatively impacted on recognition accuracy, although the reliance on such regions grew as SI increased. Conclusions: Semantic interference is reduced due to pathological ageing and coupled with subtle oculo-motor compensatory strategies, confirming the intimate connection between overt attention and memory processes