Our character traits make it possible to predict a wide range of economic behaviour, from success in terms of academic performance to that on the labour market. Today economics, along with psychology, helps us to understand how our identity and personality is formed.
 

Individuals are often guided by non-economic motivation. Important decisions are inspired by “animal spirits” and tend to amplify macroeconomic fluctuations. One of these instincts, a sudden decline in faith, is at the core of the current recession. Governments have an important role to play in limiting animal spirits and setting the stage. So what should they do now to get out of the crisis?

What will the world be like after the crisis? What rules will make it possible to avoid arriving at the excesses that caused it? The response of someone who has spent her life at the highest levels of the International Monetary Fund.

Subprime mortgages lie at the origin of the crisis. So what are they exactly? And what problems do they bring?
 

STEFANO ZAPPALA' (linked in video conference)

How and how much do processes of globalisation influence changes in values and social recognition for intellectual professions? How does the relationship between professionals and users change? What responsibilities are there towards the community?

 

How is a brand constructed? What relationship is there between the identity of a product and the identity of a company? Global markets, brand identity and cross-influences: issues to reflect on in a transitional phase of marketing, moving towards so-called ‘societing’.
 

President MASSIMO GAGGI
Prosecution ROBERTO PEROTTI
Defence LUIGI GUISO

Depositions by NOURIEL ROUBINI, NICOLA PERSICO

Reasoning about the future means interpreting the present. The crisis also affects social enterprises and many players in the third sector, but overcoming it involves a different role for the economy in which they are actively involved. This world innately promotes cooperation between players, enhances the local identity  and generates social capital. These values are indispensable in order to come out of the crisis stronger than before.
 

There are collective forms of denial of reality in line with the rational choices of individuals. These collective mechanisms can explain economic bubbles and the collapse of trading markets.

Identity is an essential competitive factor in the success of an author and of publishing houses. In global literary markets the rights of authors who have become publishing brands in their own right are fought over, while there is an explosion in phenomenal sales. Large increasingly more multinational groups must manage their best-selling authors and at the same time construct the success of new writers, dealing on the one hand with a growing concentration in terms of distribution and on the other with the effects of the Internet.

How the Italian entrepreneur can interact with a business culture as different from our own as the Chinese culture, which has completely different rules and attitudes, meaning that it is often necessary to refute consolidated certainties and identities.
 

Who is the new Roosevelt? What do the different fiscal stimulus packages drawn up by the governments of the G20 consist of? And will they be effective in combating the recession? 

Today the geopolitical space of the European Union is constantly expanding, what is more with very variable structures. To what extent is it homogeneous and representative of a common identity going beyond national and sub-national confines? This is a central question for understanding the future of the EU as a potential geopolitical force and as a coherent and competitive economic space.


 

speakers MARKUS BRUNNERMEIER (video link) and MARCO ONADO, lavoce.info
 

The weakness of proportional systems is the fragmentation of power. However, the weakness of first past the post systems is the lack of representation for minorities. So how should democratic systems  design systems combining the decision-making capacity of the simple majority system with measures to protect minorities? How can they reach these objectives while treating all citizens in the same way? How can they give weight to the minorities without compromising the wellbeing of the majority?

The case of Ecuador represents a total innovation. Alongside the public and capitalist economy, the recently approved new constitution also recognises the role of the solidarity economy, including cooperative businesses, fair trade, ethical finance, peasant organisations  and the ethnic minorities. It provides for a varied combination of experience and good practice designed to promote  socio-economic participation, social protection and the development of personal potential.

In Italy there are two management systems: one based on loyalty to the owner, the other on performance. The second seems to work better than the first in generating added value, employment and work for the company and at the same time satisfies managers. So why do so many companies adopt the loyalty model?

The role and importance of the SME system, which could now become the driving force in helping the country come out of the crisis, if supported by appropriate measures to relaunch the economy, thanks to their widespread diffusion.

 

Many economic activities – the purchasing or sale of assets, investment, hiring and firing – are influenced by social relations and take place in the context of norms and cultures. The choice of an identity, of who one is, is perhaps the most important economic decision made in one's life. The limits imposed on this choice by social divisions can represent the most significant deciding factors for the wellbeing of individuals. Some win and some lose as a result of these constraints. We take a look at who and why.

Thanks to Slow Food thousands of small producers have succeeded in preserving traditional local foods and the local identity against the mass production of large multinational companies. The founder of the movement – a supporter of biodiversity – discusses the question with an experienced economist-manager who has always affirmed, on the basis of economic results, that freedom of trade and movement for people has increased wellbeing and the possibility of choice.

National identities are largely moulded around cultural values such as community spirit, faith in others and the central nature of the family. These values condition the economy, politics and society in a profound manner. To what extent can they explain the differences between different economic systems and social models? Are we all moving towards the same social model? Are national identities at risk in the era of globalisation? And what is happening during the crisis?
 

The so-called "slow economy " is an integral part of the slow challenge to productivism. The 110 slow cities linked to Slow Food promote the quality of life. The small city makes a mark on the metropolis, rediscovering the specific characteristics of areas and making the most of its identity, by bringing together the positive aspects of the past and today's technology.

The common identity of players and businesses in industrial districts is one of the constituent elements today menaced by the world crisis. The previous systems of relations based on faith may represent both an advantage in facing new adversities and a stumbling block to making indispensible changes. Is there a future for industrial districts as we know them?
 

The subprime mortgage crisis in the United States has spread across the globe, amplified and becoming systemic as a result of networking effects arising when financial institutions are lenders and borrowers at the same time. A number of economic mechanisms have played a role in the liquidity and credit  crunch. The  effects of large quantities of bad loan write-downs on  borrowers' balance sheets caused two "liquidity spirals".  As asset prices dropped, financial institutions not only had less capital but also more difficulty borrowing, because of tightened lending standards. The two spirals forced financial institutions to shed assets and reduce their leverage. This led to fire sales, lower prices, and even tighter funding, amplifying the crisis beyond the mortgage market.  Lending channels dried up when banks, concerned about their future access to capital markets, hoarded funds from borrowers regardless of credit-worthiness. Runs on financial institutions following the mortgage crisis, as in the cases of Bear Stearns, Lehman Brothers and others, can and did suddenly erode bank capital.
As the risk of insolvency is high, a spiral of credit restrictions is set in motion which takes the system to the edge of the collapse. However on this occasion the central banks have reacted differently as compared to 1929.
 

President MASSIMO GAGGI, Prosecution LUIGI SPAVENTA, Defence PIER CARLO PADOAN and ANDREA PRAT
Depositions by FRANCESCO CASELLI, ALBERTO GIOVANNINI, GIOVANNI MAJNONI, CHISTOPHER MORRIS, SALVATORE ROSSI, JEAN TIROLE, WILLIAM WHITE, LUIGI ZINGALES

Is it possible for an entrepreneur to maintain his own identity once he enters the nerve centres of political power? Can he remain coherent with his ideas for innovation and growth, fighting for these to finally be transformed into reality? How does the external world change when observed from inside the "Palace of Power”?

Numerous ideas from psychology and sociology have been taken up by economists in their analysis of human motivation and economic organisation. Ideas that have been dormant in economics for more than a century re-emerge in modern economic theory that is less isolated from other social sciences.
 

Around the world there are countries with a population of 11 thousand, along with nations such as China, with more than one billion 300 million inhabitants. There are countries that divide and countries that reunite or become a part of regional blocks such as the European Union. What is the ideal size for nations from an economic point of view? And to what extent can economics explain these tendencies?

What are the roles and skills that the global economic system entrusts to the new generation of  talent in this period of crisis? What are the responsibilities of political and economic systems in the OECD countries that wish to make the most of new generations and cultivate creativity and innovation?
 

Time-use data allows economists to get a better idea of the way households organise their lives and time, enabling them to understand how men and women share work and leisure and how the unemployed organise the time available when they are not employed in the market.
In particular, time-use data from four countries shows that the unemployed spend most of their time in additional leisure and personal activities, rather than in increased household production, with little relation between the duration of unemployment and the division of time between household and leisure activities, particularly in areas of long-term unemployment and in contrast to areas where unemployment has risen cyclically.

How can we learn to trust strangers? Why are there good and bad neighbourhoods? Does ethnic diversity matter for our welfare? Why do some animals prefer a single partner while others prefer several? And, what has our brain to do with it?

speakers NICHOLAS BLOOM (video link) and TOMMASO MONACELLI, lavoce.info
During the debate the book written by the economists of lavoce.info Il mondo sull’orlo di una crisis di nervi, edited by Loriana Pelizzon, Castelvecchi editore (2009), will be presented.
 

The financial crisis and the subsequent recession have sparked off powerful protectionist forces. Globalisation, which has contributed so decisively to development in the last few years, is in danger. The transfrontier regions, which have been at the forefront in processes of integration between the  economies of different states, can act as a defence against pressure to move backwards. What initiatives and which alliances may be most effective?

Inequality linked to the caste system  and a spoiled collective identity has given rise to a range of behaviour affecting development, including effects on cognitive performance, norm enforcement and cooperation. Various studies and  experiments in India have demonstrated repeatedly that the caste system affects not only relations between groups, but also within groups. Assumptions can lead to systematic bias that is significant for development and that economics can help to explain.
 

The identity of peoples and nations is an historic construction. It often generates conflict: the Greeks – like the Romans – defined themselves in contrast to the Barbarians. In the modern and contemporary age new peoples have been constructed as a result of wars and processes of integration, characterised by territorial but also by cultural, ethnic and religious identities, to which one chooses to belong.

Italians know less about finance than their American counterparts. This ignorance gives rise to considerable costs for the individual saver, who must choose between increasingly complex financial products. We try to estimate these in the USA and evaluate how they can be reduced with financial education. It may also be useful for our country.
 

Economic solidarity networks sprang up in Brazil in the 1990s in order to provide a concrete response to people's needs and as a tool for promoting an alternative local and sustainable economy. They offer an alternative proposal for dealing positively with the current global crisis.

In 1933 regulation of the stock market was introduced in the USA in order to recover faith in the financial markets. Today a new approach is  necessary in order to deal with the crisis and it is already possible to identify solutions to replace and perfect regulation.

 

The revolution of Sicilian entrepreneurs who have rejected the Mafia racket and collusion provides a possible model for change in the context of a global crisis. There is a strong risk of deviating from legality. Criminal bullying has been countered by a reaction based on a strong ethical driving force, the request for certain rules and legislative measures that are effective in combating increasingly globalised Mafia organisations.

From one crash to another, the constant feature is the nationalisation of losses caused by incompetent and dishonest managers. In prosperous times, top management cashes in with stock options and astronomical bonuses, whereas when companies are ruined, the bill is passed on to the community. In this way the system of incentives and deterrents which lies at the foundation of the market economy is completely undermined. The selection made by the competitive system is distorted by annulling the principle of responsibility.

There are different types of financial crisis and different interpretations of these crises. Some make reference to so-called economic bubbles, others to expectations, given different potential conditions of balance. In the light of these theories, it is possible to better understand the crisis underway and the importance of the institutions in an efficient financial system.
 

Many believe that globalisation favours large businesses. Others affirm that small businesses have greater advantages, as in this way they gain access to more remote markets. We are seeing a profound change in the extent and methods of international exposure for Italian businesses. Is it likely that the current crisis will lead to a change in the global value chain, heralding more opportunities rather than increased mortality?

From miracle to decline? Between 1950 and 1991 the per capita income in Italy increased by an annual average of 3.8% in real terms. In subsequent years the average was just 1.3%. In 1950, the average Italian had an income equivalent to 38% of the average American. In 1991 he had reached 76%. This then declined to 64%. Italy is losing ground not only in relation to the United States, but also as compared to almost all European countries. What has happened? Or what has stopped working? Will the global crisis exacerbate this decline, or could it represent a new turning point?

In an era of crisis such as the one we are going through, there is an increasing need to find one's identity in a community. The point of reference is often linked to the land. The landscape and physical environment are no longer romantic aspects but rather concrete sources of wealth if adequately exploited. A community linked to the land may have values of inclusiveness and solidarity, but it may also exclude.

 

President MASSIMO GAGGI, Prosecution MARCO ONADO, Defence LUIGI ZINGALES

Depositions by MAUKUS BRUNNERMEIER, JOHN COCHRANE, PIETRO MODIANO, WOLFGANG MUNCHAU

In an increasingly fluid society undergoing such profound upsets, is there any sense in choosing a target for communications? Do consumers recognise themselves more in socio-demographic classifications or in the tribes that show a sense of belonging to a common identity? Perhaps we are coming to the end of advertising as it has been understood to date. Should we move on to 'invertising'?

Our knowledge reflects the influence of our near neighbours and may give rise to errors.  The fact that knowledge flows over short distances helps us to understand the importance of cities in today's knowledge-intensive world. However, the power of local influence also helps us to understand why humans persist in local errors, such as beliefs about poverty or the dangers of different ethnic groups.  While human error is typically seen as being at odds with the spirit of modern economics, the tools of economics are actually the best weapons we have for understanding mass mistakes.

Given current trends in terms of migration flows across borders, cultural diversity, cultural integration and identity formation are and will be central elements of our modern societies. Differential patterns for the assimilation of minority groups (for example through cultural transmission learning and identity formation) have different implications for the political economy of redistribution and welfare state institutions.
 

Long-term transformation has taken place as regards the State, its capacity to act and its relationship with citizens. It is necessary to take the opportunity to reflect particularly carefully on possible ways of intervening to promote greater efficiency and the ability to support social and economic development.

What does Obama's election tell us about the state of racial prejudice in the USA? What influence could the election of the first coloured man have on the evolution of race relations in the United States?
 

speakers ANIL KASHYAP (video link) and VINCENZO GALASSO, lavoce.info

Britain once prided itself as a model of how to create a successful multicultural society.  But the bombs in London mean many now think Britain has sleepwalked into creating a society of incompatible cultures.  Taking a look at some of the evidence, it is possible to evaluate the current situation.

The rise in the price of food products has increased expenditure for imports for developing countries by 25%. The world economy will not be the same for a while. What has the economic boom meant for most of the world's population? The world has drawn on its natural resources with rapacity and most of the population in developing countries has gained little from it. Reducing inequality will not be easy.
 

How globalisation can help us to move out of the Depression. An update on the proposals of the Commission on Growth and Development.