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My broad research interests include macroeconomics, growth, innovation, the economics of vaccines, health economics, and political economy.

In my research, I use a combination of frontier theories and quantitative approaches to develop my ideas, which I believe could have a strong beneficial impact on the collective well-being of current and future generations.

Most of my papers and current research interests fit in two broad areas, which I briefly summarize in the following, illustrating some selected papers, as well as pointing to unanswered questions that could be fruitfully addressed by future research.

1. Sequential innovation and growth

"Science-based R&D in Schumpeterian growth", with Guido Cozzi, Scottish Journal of Political Economy, 56: 474-491,2009. 

Innovation is the source of technological progress and, ultimately, the main driver of long-run economic growth. In this work, we analyzed the role played by outsider upstream innovators, either for-profit firms (technological start-ups) or curiosity-driven scientists in academic institutions, in the most successful national innovation systems (primarily the US). To this aim, we developed a new modeling toolkit to analyze the effects of basic research on economic growth and welfare. We investigated the black box of university- and publicly-run research institutions by studying the incentives and the mechanisms implemented to encourage the applicability of basic research and how these last may spur economic growth. Moreover, we showed that these mechanisms can have substantial general equilibrium consequences even if only social norms support them.

"Does Intellectual Monopoly Stimulate or Stifle Innovation?  with Angus C. Chu and Guido Cozzi, European Economic Review, Vol. 56, Issue 4, 2012, 727-746.

To fully assess the desirability of increasing IPR for growth and welfare, one needs to consider an industrial organization framework rich enough to encompass both horizontal and vertical innovation. This allowed us to study the effects of backloading or frontloading profits to the incumbents or the new entrants of an industry. Our model suggests that strong IPR backloading profits to previous incumbents would reduce aggregate growth when calibrated to the US data. On the other hand, encouraging horizontal innovation would also generate many new varieties to increase US welfare.

"Stage-Dependent Intellectual Property Rights” with Angus C. Chu and Guido Cozzi, Journal of Development Economics 106 (2014) 239–249

This article is about optimal IPR in developing countries. Inspired by the Chinese experience, we developed a Schumpeterian growth model of distance to frontier in which economic growth in the developing country is driven by domestic innovation and imitation and transfer of foreign technologies through foreign direct investment. This paper showed that optimal IPR protection is stage-dependent: at an early stage of development, the country implements weak IPR protection to facilitate imitation. At a later stage of development, the government implements strong IPR protection to encourage domestic innovation. Finally, it provided a panel data analysis showing that empirical evidence robustly supports this theoretical finding.

Sequential R&D and Blocking Patents in the Dynamics of Growth with Guido Cozzi, Journal of Economic Growth 19, 183–219 (2014)

Focussing on the US experience, we studied the incentive of sequential innovators in the context of modern Schumpeterian growth, according to a stylized pre-Bayh-Dole Act (1980) scenario, and a post-Bayh-Dole Act (1980) scenario.

Over the course of about twenty years of court litigations following the application of the Bayh-Dole Act (1980-2002), the possibility of patenting basic research was gradually granted and extended to a broader and broader category of innovations. This period (1980-2002), often referred to as the pro-patent era, culminated with the famous US Supreme Court decision on Madey v. Duke University of 2002. The Supreme Court decision favored the instances of the inventor, Dr. John M.J. Madey, against Duke University for the unlicensed use of a patented research tool for university teaching, as long as the use of the patented technology is proved to be related to the infringer’s main business (i.e., teaching for a university).

With this decision, the US Supreme Court radically upset the jurisprudential doctrine prevalent up to that moment, according to which universities and national research institutions, like the National Health Institute, were granted a generous research exemption regime from the patent law precisely given their contribution to the training of the new generations of scientists. We provided a new sequential innovation-based growth model with endogenous individuals' educational choices.

Moreover, since basic IPR protection is granted upon court decisions, we modeled a mathematical evolution of the common law itself. This significant modification allowed us to schematically replicate the observed changes in the skill premium, education, and strengthening of IPR in the US during the Eighties and Nineties of the XX century. This article contributed to explaining the well-known dynamics of the skill premium and education in the US, which motivated prominent theories of skill-biased technical change and directed technological change.

Should the Government Protect its Basic Research?”, with Guido Cozzi, Economics Letters, vol. 157, 2017 August, pages 122-124

Traditionally, basic research is mainly performed publicly. Yet in the US public research findings were not patentable until 1980, and in other countries are not yet patentable. Patentability renders public research more directed, with less potential waste, but it also restricts private applied research. This paper shows, by means of a multi-stage Schumpeterian growth model, that in the long run the first effect is bound to dominate.

Counting Innovations: Schumpeterian Growth in Discrete Time”, with Guido Cozzi, Economics Letters, Volume 189, April 2020

The most recent literature on unemployment and growth with nominal frictions and Schumpeterian creative destruction, pioneered by Benigno and Fornaro (Rev Ec Stud, 2018), embeds a tractable endogenous TFP growth mechanism that connects productivity gains to expected future innovators’ profits. Their model exhibits the following features: (i) productivity is driven by R&D investment; (ii) R&D investment level is determined by the forward-looking optimizing behavior of innovators; (iii) price and wages dynamics are affected by nominal and real rigidities; (iv) stochastic shocks to fundamentals stochastically hit the economy.

In this article, we generalized Benigno and Fornaro’s (2018) approach to unemployment and growth. We showed how a simple-to-apply discrete time innovation process leads to a straightforward translation of continuous time modeling into discrete time. This is potentially useful to micro-found the generality of the Schumpeterian dynamic stochastic general equilibrium (DSGE) models.

"Privatization of knowledge: Did the U.S. get it right?" with Guido Cozzi, Economic Modelling 98 (2021) 179–191

Should knowledge creation be publicly or privately funded? This study investigated the shift in the U.S. innovation system towards the patentability and commercialization of the basic research that happened during the early 1980s. We interpreted this change as scientists and researchers becoming more responsive to “market” forces. Before 1980, universities researched by employing scientists motivated by “curiosity.” After 1980, scientists could patent their research and universities could behave as private firms. In the context of two-stage inventions (basic and applied research), this reform has a priori ambiguous effects on innovation and welfare. We built a Schumpeterian growth model and match it to the data to assess this critical turning point from the innovation and welfare perspectives.

Medium Frequencies in Non-Frontier Economies, with Guido Cozzi and Maria Bolboaca, European Union Horizon 2020 Grant 727144 research paper

As a key objective of frontier macroeconomics is to overcome the traditional doctrinal division between cycle models – suited to analyze the fluctuations of the macroeconomic variables – and growth models – which are used to study the long-term behavior of the macroeconomic variables; we considered the potential of the transitional economies of the Eastern European countries previously part of the ex-Soviet block. For the first time in this literature, our research paper studied the macroeconomic dynamics generated by a non-standard DSGE model combining real business cycle and Schumpeterian growth in a distance-to-frontier framework and calibrated the model using first-order moments of data for Hungary.

In particular, by allowing multinational firms to enter the economy and challenge existing incumbents, we studied the tension between their direct positive productivity contribution and their indirect negative contribution through the expected obsolescence of domestic innovators. We estimated the model using a full-information approach and show that multinationals’ entry is both boon and bane for non-frontier economies.

2.       Covid-19: the macro-economics of vaccines 

"Covid-19 Vaccines, Innovation and Intellectual Property Rights”, with Guido Cozzi, in “Handbook of Labor, Human Resources and Population Economics”, K.F. Zimmermann Eds.; Springer Nature: forthcoming.

In the absence of available vaccines or treatments, during the Covid-19 pandemic outbreak, national policymakers over the world suddenly faced a tragic trade-off between public health, on the one side, and avoiding the consequences of a self-inflicted economic crisis and limitations of personal liberties, on the other side.

Sweden decided to keep all activities open; Cuba and Israel, instead, focused on a timely predisposed mass vaccination campaign that would promptly alleviate the trade-off.

Trying to follow the Chinese example to the extent compatible with democratic standards, and the recommendations of the international scientific community, the main strategy adopted by most countries was the call to resilience and national unity at a time of a profound crisis. Citizens struggling with personal liberty restrictions; entrepreneurs faced with bankruptcy; deep economic recession; increasing national debts, children out of schools and isolated from one day to the next; elderly isolated and felt abandoned in their old-age care facilities, where the new virus has produced its most tragic consequences, and the doctors first faced the virus without basic protective equipment: this was the economic and social dimension of the Covid-19 crisis for the majority of countries, including the US.

Then, thanks to Covid-19 vaccines, in high-income economies the social and economic conditions of our living environments quickly converged to pre-pandemic times. Anyway, the global fight against Covid-19 is not over as the accumulated delays in providing effective vaccine intervention in the low- and middle-income countries are ultimately responsible for the ongoing virus circulation at the global level and the proliferation of immunity-escaping SARS-Cov-2 variants.

More than 100 countries have asked WTO to temporarily waive Covid-19-related patents, to stimulate the entry of more firms worldwide and rump-up vaccine production. The high-income economies blocked this proposal more times at the WTO. This reminded of the traditional poor-rich country opposition well-known in the pharmaceutical industry in the international political opposition to the application of the TRIPS, which let to the Doha Declaration, back in 2003.

In this chapter we extensively reviewed the available medical and economic literature on the subject, guiding the reader step-by-step to the leading scientific, political, and cultural challenges in granting broad worldwide access to vaccination.

We showed that governments can and should take an active role in supporting private R&D on new and better vaccines, while at the same time promoting the know-how transfer needed to guarantee a production booster and reach world herd immunity. The insights of this chapter on how to overcome knowledge transfer impediments will be also helpful for future pandemics.

"Covid-19 and the health-, technological- and socio-economic breakthrough of ivt mRNA vaccine platforms", with Guido Cozzi, Steve Pascolo, and Mark Mellet, NEW PROJECT

In November 2020, with an unprecedented scientific development speed, new Covid-19 vaccines were announced and slowly made broadly available for the eligible populations, accompanied by an average one-year delay in the global distribution of doses due to puzzling rigidities in the manufacturing and distribution processes, in the high-income countries at least. 

Among these vaccines, those developed by the the biotechnological start-up companies BioNTech and Moderna, who were soon destined to become the new market leaders according to both reality and the Schumpeterian creative destruction mechanism.

ivt mRNA technologies opened the way to both new production possibilities (life-saving products) and different production methods, making it more efficient economically. For this reason, market experts predict that synthetic mRNA vaccines have the potential to deeply impact the vaccine industry productive structure in the future, and we are inclined to belive that the mRNA technological revolution has just unveiled its potential to change the rules for market leadership.

Now, in the aftermath of the Covid-19 pandemic, the regulation of vaccines should change because both technological and demand conditions are changing, these last in a way that implies the necessity to manufacture several millions of vaccine doses within months. In my view, this aim can be successfully achieved only through an interdisciplinary user-inspired approach able to implement within a unitary regulatory framework encompassing the contributions of the biopharmaceutical research community on ivt mRNAs and those of research economists on innovation and IO. 

For this reason, I started a new exciting research project with the ultimate aim of providing the first regulatory framework for the development and mass production of new (ivt) mRNA technologies. I am proud to work on this project along with Guido Cozzi, Steve Pascolo, and Mark Mellet.

We will examine the role of the interaction between the intrinsic characteristics of the synthetic mRNA molecules (which influence the safety and efficacy of new mRNA drugs) and the design of public regulation in determining the speed at which safe and effective vaccines can be brought to the market. As a team, we will investigate the ivt mRNA technologies under four different perspectives, each affecting the tasks of the public regulatory authorities:

  1.  animal experiments,

  2.  product tailoring (personalized and individualized cancer vaccines),

  3.  modularity (scalability) of production,

  4.  endogenous long-term innovation dynamics.

Each of these perspectives requires an interdisciplinary approach between economics and molecular biology to be dealt with properly, i.e., to implement health regulation concerns and economic analysis into helpful mathematical modeling of the new mRNA technologies.

3. Miscellaneous

As academic curiosity constantly drives me to explore different fields in economics, in the following I describe my research projects which do not fall into the previous categories. 

"Will a Shrink Make You Richer? Gender Differences in the Effects of Psychotherapy on Labour Efficiency", with Guido Cozzi and Noemi Mantovan, European Economic Review 109 (2018) 257–274 

Mental health problems are very common and have a detrimental effect on personal income and the overall economy. However, psychotherapy can reduce the negative effects of mental health issues and increase productivity. To the best of our knowledge, this article presents the first theoretical and empirical study of the effects of consulting a psychotherapist on labor income. Moreover, our analysis shows gender differences both in the rate of help-seeking and in the returns generated by consulting a psychotherapist. If psychotherapy can mitigate the effects of mental health problems on productivity, it should have a substantial impact on personal income as well as on the whole economy.

"State capacity, vaccination rates, and the paradox of the selfish elites", with Guido Cozzi, in " Elite Quality Report 2022: Country Scores and Global Rankings", T. Casas-Klett & G. Cozzi. (Eds.),. Zurich: Seismo. doi: 10.33058/seismo.30769.7530

This piece looks at the insights form selected sub-index variables from the Elite Quality Index 2022 (EQX2022). In particular, we considered the Covid-19 vaccination rate indicator (VAX, iii.7) and see how it does correlates with other EQX2022 sub-indicators at the global level. From such analysis a striking evidence emerges:

  1. A huge worldwide Covid-19 vaccine inequality, with 19 out of lowest-ranking 25 nations in Africa.

  2. Positively shocking indeed, the world-class performance of Cuba, ranking second in VAX, iii.7.

  3. Redistribution, measured by Regional redistribution as % of government budget (REG, iii.7) and Subsidies and transfers as % of expenses (SNT, iii.7), positively correlates with the vaccination rate indicator (VAX, iii.7).

  4. From an international trade perspective, we find that economies prone to impose discrinatory trade restrictions, measured by the variables Shares of imports targeted by protectionist measures (IPM & IPS, iv.10), and Shares of discriminatory government interventions as % of total interventions (DGI & DGS, iv.10), attained the highest scores in Covid-19 vaccination rate indicator (VAX, iii.7). This selfish ‘America first’ and ‘Europe first’ approach, resulted in them losing face with most of the developing world, while their high Covid-19 mortality rate, age-adjusted (COM, iii.7) also caused them to vaccinate quickly. Health nationalism is just a form of nationalism, and this could probably help to explain the previous point 1 as well as the following:

  5. A striking correlation emerges between the the Indicators VAX and CO2 emissions (CDO, iii.9): high vaccination rates are correlated with high carbon emissions.

Althought the previous findings are not a proof of causality, they provide us with the most stimulating insight on the national elites business model in the Covid-19 pandemic.​

"Italy: Waiting for its private elites to stop extracting value", with Guido Cozzi, in " Elite Quality Report 2022: Country Scores and Global Rankings", T. Casas-Klett & G. Cozzi. (Eds.), Zurich: Seismo. doi: 10.33058/seismo.30769.3670

This piece summarizes the evidence provided by the Italian score card of the EQX2022 and provides it with an interpretation in line with the recent socio-economic Italian history, with a special interest on the relationship between the country's political and economic elites.

The EQX is composed by and Poltical pillar and by an Economic pillar. The picture captured by the score card shows that by the end of 2021in Italy, the Economic Power is more concentrated (ii, rank # 53) than Political Power (i, rank # 31), and the economic elites appear less value-oriented (iv, rank # 56) than the political elites (iii, rank # 25).

The Italian production structure is dominated by large industrial concentrations with a family footprint, with few self-made billionaires (BSM, iv.11, rank # 51) to challenge them. At the aggregate level, dynastic capitalism has promoted inefficient business models, which have hindered the country’s resilience to globalization. This failure has long roots. Since the 1990s privatizations, when the Italian productive structure based on state-owned enterprises collapsed and the private elites quicky cought the opportunities created by such dismantling of the public, without increasing competition and fairness.

With 43% of its union members (12 million, UNI, ii.4, rank # 78) being retired individuals, Italy 2022 is not a country for the young. Currently, pension payments represent over one-third of primary public expenditure (SNT, iii.7, rank # 111) and significantly contribute to the Italian national debt (DBT, iii.9, rank # 140). The Youth unemployment rate (YUN, iv.12, rank # 131) is high, and the Labor force participation rate is consequently very poor (LFP, iv.12, rank # 131).

Trying to tackle down a worrying intra- and intergenerational socio-economic inequality, in 2019 for the first time the Five-Star Movement (M5S) government introduced a universal unemployment public insurance scheme (the much debated ‘citizenship income’). Moreover, Mario Draghi secured the EU Recovery Fund funding and managed to massively vaccinate Italy population against Covid-19 (VAX, iii.7, rank # 14), thus reviving the country's health and socio-economic life. But without more enlightened and inclusive trade unions and business elites, Italy will not properly value the post-pandemic funding it will receive from the EU, while the young, the self-employed and small enentrepreneurs will continue to languish.

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