Publications

Abstract We adopt a philosophical perspective of equality of opportunity and address the issue of whether outcome inequalities are legitimate when they come from differences in talent. We propose a cumulative definition of talent. In a dynamic setting, talent is a by-product of past-effort, current effort and innate talent, which becomes a residual as time goes by. It implies that talent can change from the status of a circumstance when people are young to an almost responsibility variable when people are getting older. We plug this definition of talent into the Mirrlees model of optimal non-linear income tax and we show that the conflict between the principle of compensation and the principle of natural reward boils down to the optimal income tax with Rawlsian weights in the second-best setting.
Keywords Optimal Income Taxation, Equality of opportunity, Effort, Talent
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Abstract Background: In their quest for universal health coverage (UHC), many developing countries explore alternative financing strategies to address the potential budgetary impact of health coverage expansion (for example, deferred debt versus current finance through taxation or premiums). Given the limited fiscal space, these policies may have different implications for fiscal sustainability and may worsen intergenerational inequality. Methods: We assessed the impact of UHC on fiscal sustainability and intergenerational inequality using an overlapping generations model within a general equilibrium framework, which we calibrate using data from the Palestinian Expenditures and Consumption Survey (PECS-2011) and the Social Accounting Matrix (SAM-2011). Fiscal sustainability is assessed using a prudent debt–GDP level of 39%. Intergenerational inequality induced by different policies is assessed by comparing the relative incremental burden (RIB) borne by each generation following the policy adjustment. Findings: In the absence of any policy adjustment, an ad hoc expansion of health coverage would increase the debt–GDP level to 15% above the prudent level. This indicates that the UHC fiscal stance may be financially unsustainable in the long run, therefore calling for a policy adjustment. Among the policies we examined, UHC finance through the increase of premiums (whether current or deferred) seems to be unsustainable and may further widen intergenerational inequality (RIB∈[3,6]). By contrast, current finance through indirect taxes helps to restore a prudent debt–GDP level and seems to be associated with a lower level of intergenerational inequality than deferred-debt finance through direct taxation (RIB of 1·25 and 5, respectively). Interpretation: Among the policy options assessed, the current indirect taxation emerged as the best policy option in terms of its impact on both fiscal sustainability and intergenerational inequalities. However, from a policy perspective, the capacity of governments to raise additional revenues might be constrained in the short-term. Under such circumstances, deferred-debt finance may be preferred—a situation in which policy makers may have to trade fiscal sustainability against intergenerational inequality. Funding: The A*MIDEX project (number ANR-11-IDEX-0001-02) funded by the French Government programme Investissements d'avenir, managed by the French National Research Agency (ANR). Contributors: SA prepared the data, conceived the framework for the study and carried out data analysis. MA-Z developed the framework for the study, carried out data analysis and wrote the Interpretation section. BV developed the framework for the study. All authors have seen and approved the final version of the Abstract for publication.
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Abstract The pure risk sharing mechanism implies that financial liberalization is growth enhancing for all countries as the world portfolio shifts from safe low-yield capital to riskier high-yield capital. This result is typically obtained under the assumption that the volatilities for risky assets prevailing under autarky are not altered after liberalization. We relax this assumption within a simple two-country model of intertemporal portfolio choices. By doing so, we put together the risk sharing effect and a well-defined instability effect. We identify the conditions under which liberalization may cause a drop in growth. These conditions combine the typical threshold conditions outlined in the literature, which concern the deep characteristics of the economies, and size conditions on the instability effect induced by liberalization.
Keywords Emerging markets, Volatility, Risk sharing, Financial liberalization, Economic Growth
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Abstract Constitutional consistency requires that the voting rule produce the same outcome at any vote profile as the one it produces at its induced vote profile for any given set of voting rules (or constitution) consisting of the voting rule itself. We consider this type of consistency in two voting models with single-peaked preferences, one with a finite set of alternatives and the other, when the set of alternatives is the interval [0, 1]. We show that cumulative-threshold rules are the only unanimous, anonymous and constitutionally consistent voting rules. These rules assign monotone decreasing (increasing) thresholds to each alternative and pick the minimum (maximum) alternative from the range of the vote profile that receives more cumulative votes (votes received by all the alternatives smaller (or greater) than itself) than the threshold assigned to it. This class of rules consists of the min, max and median rules. The addition of continuity leads to the characterization of k-median rules in the interval voting model.
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Abstract The literature on immigration and health has provided mixed evidence on the health differentials between immigrants and citizens, while a growing body of evidence alludes to the unhealthy assimilation of immigrants. Relying on five different health measures, the present paper investigates the heterogeneity in health patterns between immigrants and citizens, and also between immigrants depending on their country of origin. We use panel data on more than 100,000 older adults living in nineteen European countries. Our panel data methodology allows for unobserved heterogeneity. We document the existence of a healthy immigrant effect, of an unhealthy convergence, and of a reversal of the health differentials between citizens and immigrants over time. We are able to estimate the time threshold after which immigrants’ health becomes worse than that of citizens. We further document some heterogeneity in the convergence of health differentials between immigrants and citizens in Europe. Namely, the unhealthy convergence is more pronounced in terms of chronic conditions for immigrants from low-HDI countries, and in terms of self-assessed health and body-mass index for immigrants from medium- and high-HDI countries.
Keywords Europe, Health convergence, Health differentials, Health economics, Healthy immigrant effect, Immigration
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Abstract We consider a game where a finite number of retailers choose a location, given that their potential consumers are distributed on a network. Retailers do not compete on price but only on location, therefore each consumer shops at the closest store. We show that when the number of retailers is large enough, the game admits a pure Nash equilibrium and we construct it. We then compare the equilibrium cost borne by the consumers with the cost that could be achieved if the retailers followed the dictate of a benevolent planner. We perform this comparison in terms of the Price of Anarchy (i.e., the ratio of the worst equilibrium cost and the optimal cost) and the Price of Stability (i.e., the ratio of the best equilibrium cost and the optimal cost). We show that, asymptotically in the number of retailers, these ratios are bounded by two and one, respectively.
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Abstract Central bank communication is becoming a key aspect of monetary policy. How much financial markets listen and, possibly, understand Banco de Mexico’s communication on its monetary policy stance should be a key consideration for the central bank to further modernize its monetary policy toolkit. In this paper, we tackle this issue empirically by using our own index of the tone of communication based on Banco de Mexico’s speeches and statements and find that Mexican money markets do not only listen but they also understand the stance of monetary policy conveyed in the central bank’s words. Regarding the ability to listen we find that both the volatility and volume in the money market rates change right after communication from Banco de Mexico’s governing body. As for the markets’ understanding, we document a statistically significant rise in money market rates the more hawkish communication is. All in all, our results show strong evidence of effective oral and written communication from the Central Bank towards Mexico’s money markets.
Keywords Money market, Mexico monetary policy communication
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Abstract We consider an autocracy where the ruling elite control both the resource wealth and ed- ucation policies. Education prompts economic growth and enriches the budget of the elite. However, education also increases the “awareness of citizens”–capturing their reluctance to accept a dictatorship and their labor market aspirations –and forces the elite to ex- pand redistribution or handover the power. A power handover leads to a more democratic regime, where the elite retains (at least partially) its economic power. This trade-offis the backbone of our Lipsetian theory of voluntary power handover. This theory provides new insights on the positive relationship between economic development, education, and de- mocratization, and on the negative relationship between inequality and democratization. Finally, we revisit the resources-curse hypothesis within our setting
Keywords Resource curse, Institutional change, Human capital, Lipset’s theory
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Abstract Effcient biodiversity management strategies aim to allocate conservation efforts so as to maximize diversity in ecological systems. Toward this end, dening a diversity criterion is an important but challenging task, as several different indices can be used as biodiversity measures. This paper elicits and compares two criteria for biodiversity conservation based on indices stemming from different disciplines: Weitzman's index in economics and Rao's index in ecology. These indices use different approaches to combine information about measures of (1) the probability distributions of the species that are present in an ecosystem (i.e. survival probabilities) and (2) the degree of dissimilarity between these species. As an important step toward in situ conservation criteria, we add to these elements information about (3) the ecological interactions that take place between species. Considering a simple three-species ecosystem, we show that criterion choice has palpable policy implications, as it can sometimes lead to divergent management recommendations. We disentangle the roles played by elements (1), (2) and (3) in the ranking outcomes, which allows us to highlight several specificities of the two criteria. An important result is that, other things being equal, Weitzman's in situ ranking tends to favor robust species that are least concerned with extinction, while Rao's in situ ranking generally gives priority to more vulnerable species that are closer to extinction.
Keywords Conservation management strategy, Biodiversity indices, Ecological interactions, Public policy, Species prioritization criteria
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Abstract The understanding of ecosystem services is essential to support sustainable use and preservation of ecosystems. Coralligenous habitats, main contributors of the Med iterranean marine biod iversity, are yet und erstud ied in term of services provid ed. This stud y presents an original small-scale approach to investigate the services provided by coralligenous habitats of a French stud y area consisting of two marine sites (Marseille and Port-Cros sites) in order to cover two contrasted anthropogenic pressure despite the small-scale. Our results are based on the opinions of 43 experts who ranked 15 services in terms of existence and level of importance for human well-being: supporting ecological functions were consid ered the most important, then provisioning and cultural services. Regulating services were consid ered uncertain d ue to a lack of knowled ge. The small-scale approach highlighted a need for a referential frame to determine the existence of services (e.g. geographical and temporal scales, benefits and beneficiaries levels).
Keywords Marseille, Port-Cros, Workshops, Experts&#039, knowledge, Appraisals, Interviews
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