This paper examines how publication-based tenure-track systems affect the careers of Ph.D. graduates in Economics. We leverage a 2010 reform in Italy that replaced open-ended assistant professor (AP) positions with fixed-term contracts and introduced publication minimum requirements for career advancement. Using survey and administrative data, along with a Difference-in-Differences Event-Study approach comparing Economics to less academically-oriented fields, we find that the reform significantly reduced the likelihood of Economics Ph.D. graduates entering academia in Italy, while increasing transitions to academic careers abroad or to public and private sector jobs. Talented graduates were disproportionately affected, revealing negative selection into Italian academia following the removal of permanent AP positions. Despite these trends, tenure-track hires tend to publish more in high-ranking journals, suggesting that the reform’s incentive effects may partly mitigate its negative selection effects.

As sports betting is surging worldwide, so are concerns about excessive gambling. To explore the drivers of this phenomenon, we conduct an experiment investigating how regular sports bettors in urban Tanzania value sports bets and form expectations about winning probabilities. We find that subjects assign higher certainty equivalents and winning probabilities to sports bets than to urn-and-balls lotteries with identical odds, even though, in fact, they are not more likely to win. We complement the experimental evidence with original survey data on sports betting frequency and motives. Overall, our results suggest that systematic misperceptions of the risks and returns associated with sports betting may contribute to its booming popularity.

We investigate how promotion incentives affect the productivity of a large sample of high-skilled public employees: academics. In a fuzzy regression-discontinuity design, we exploit the three bibliometric thresholds of the 2012 National Scientific Qualification (NSQ), the centralized evaluation procedure regulating career advancements in Italian universities. We compare the 2013–16 research productivity of assistant professors barely qualified for associate professor—whose next goal becomes meeting the higher thresholds for the full professor qualification—with the productivity of candidates who barely miss the qualification—whose goal remains meeting the associate professor thresholds. We find that barely qualified scholars publish significantly more papers than their non-qualified colleagues, in journals of comparable quality. Our results emphasize the importance of promotion incentives as an effective incentivizing tool in public universities and more in general public organizations.

This paper analyzes the effects of bail-in and bailout policies on banks’ funding costs, incentives for loan monitoring, and financing capacity. In a model with moral hazard and two investment stages, a full bail-in turns out to be, ex post, the optimal policy to deal with a failing bank. Unlike a bailout, it allows the government to recapitalize the bank without resorting to distortionary taxes. As a consequence, however, investors expect bail-ins rather than bailouts. Ex ante, this raises banks’ cost of debt and depresses bankers’ incentives to monitor. When moral hazard is severe, this time inconsistency leads to a credit market collapse in which productive projects are not financed, unless the government precommits to an alternative resolution policy. The optimal policy is either a combination of bail-in and bailout—in which the government uses a minimal amount of public transfers to lower banks’ cost of debt—or liquidation, depending on the severity of moral hazard and the shadow cost of the partial bailout.

This paper examines the impact of financial literacy on the individual propensity to invest in financial assets. In a laboratory experiment with a two-by-two design, we study how the certainty equivalent of a risky lottery changes when varying the lottery framing and the participants’ financial literacy level. We find that presenting the lottery as a financial asset—whose payoffs need to be computed from a given return rate—rather than as a simple coin toss reduces the average value participants assign to the lottery by approximately 20% and lowers their understanding of the lottery’s structure. Enhancing financial literacy by explaining the basic financial concepts involved in the description of the financial-asset lottery, offsets the negative effects of the financial framing: it improves respondents’ understanding of the lottery and increases the certainty equivalent. Our results—which can be rationalized by ambiguity aversion—shed new light on the linkages between financial literacy and financial investment behavior. Additionally, they highlight the importance of promoting financial education to stimulate households’ financial market participation.

We study the effects of sovereign debt inflows on domestic firms. To do so, we exploit episodes of large sovereign debt inflows, which follow the announcements of the inclusion of six emerging countries into major sovereign debt indexes. We find that these events reduce government bond yields, appreciate the domestic currency, and have heterogeneous stock-market effects on domestic firms. Firms operating in tradable industries experience lower returns than firms in non-tradable industries. In addition, financial firms, government-related firms, and firms that rely more on external financing experience higher returns. The effect on financial and government-related firms is stronger in countries that display larger reductions in government bond yields. The effect on tradable firms is stronger in countries that display stronger appreciations. We provide a stylized model that rationalizes these results. Our findings shed novel light on the channels through which sovereign debt inflows affect firms in emerging countries.

This paper analyzes the real effects on firms of sovereign debt inflow shocks in emerging countries. We follow Broner et al. (2019) and exploit six episodes of country inclusions into two major local currency sovereign debt indexes. We complement their evidence by analyzing real variables and find that government-related and financial firms experience larger growth in income, employment, and dividends, relative to tradable firms, in the three years following sovereign debt inflow shocks. Our findings suggest that capital inflows to sovereign debt markets can hamper exports and benefit financial and service-based firms, thus reshaping the domestic economy.

We analyze how capital flows into the sovereign debt market affect government bond prices, liquidity, and exchange rates. To address endogeneity concerns, we construct a measure of informationless capital Flows Implied by (mechanical) Rebalancings (FIR) in the largest emerging markets local currency government debt index. FIR is associated with higher returns and greater depth in the sovereign debt market after the rebalancings. Also, larger inflows (outflows) are associated with greater currency appreciations (depreciations). Our results highlight the increasing importance of capital flows driven by demand shocks, due to the growing relevance of benchmark indexes as the preferred habitat for institutional investors.