Unconventional economic policies and sentiment: An international assessmentJournal articleMarie-Hélène Gagnon et Céline Gimet, The World Economy, Volume 43, Issue 6, pp. 1544-1591, 2020

This paper estimates, using Bayesian and global VARs, the spillover effects of unconventional fiscal and monetary policies implemented in the United States and in the Eurozone during the last decade. Consumer confidence and investor sentiment indicators are introduced in the models in order to highlight the signalling channel in the responses to economic policy innovations in times of crisis. Our results reveal that consumer and investor perceptions of innovative economic measures are relevant to study the pass-through of economic policies to the real sector in times of crisis and zero lower bound interest rates. In particular, the signalling channel plays an important role in successful unconventional economic policies. Moreover, if unconventional economic policies have an impact abroad, the effects are similar to those measured in the domestic country/region. Consequently, coordination and transparency are a prerequisite for ensuring short-term growth after a global financial crisis.

Financialization and the macroeconomy. Theory and empirical evidenceJournal articleCéline Gimet, Thomas Lagoarde-Segot et Luis Reyes-Ortiz, Economic Modelling, Volume 81, pp. 89-110, 2019

This paper sheds light on the macroeconomic impact of financialization in the banking sector. We develop a new stock-flow consistent model, which reveals that excessive leverage increases financial fragility, lowers wages, and slows down real sector investment and GDP growth. Using a panel of 29 high income countries, we then construct indicators of banking financialization and investigate the impact of the latter on the wage share, gross capital formation and GDP growth, using a Bayesian structural VAR framework, as well as a set of fixed effect regressions. Our results highlight that financialization has had a detrimental impact on real sector growth. Finally, we discuss the implications of our results to propose reforms to the international financial system.

Climate and output variability in the Euro-Mediterranean region, 1950-2000Journal articleJean-Pascal Bassino, Céline Gimet et Stephane Quefelec, Economics Bulletin, Volume 38, Issue 4, pp. 1811-1822, 2018

Despite the large literature on the link between climate evolution and country economic performance, the specific question of the effects of climatic changes via the agricultural sector broken down by annual seasons in the Euro-Mediterranean region, which is considered as a hotspot of climate change, remains largely understudied. This paper investigates both the incidences of seasonal rainfall and temperature variations on GDP from an historical perspective and the impact of climate anomalies on cereal output. Our results point to the fact that climate shocks affect significantly the GDP of Euro-Mediterranean countries specialized in the agricultural production, in particular during winter and spring. In these seasons, the impacts of climate anomalies are strong on cereal output in southern and eastern Mediterranean countries. These results underline the fact that agriculture is one of the main channels of the influence of climate change on GDP in this region. Crop diversification could be part of the response for enhancing resilience of the entire economy while preserving food security objectives.

Increase in home bias in the Eurozone debt crisis: The role of domestic shocksJournal articleCamille Cornand, Pauline Gandré et Céline Gimet, Economic Modelling, Volume 53, pp. 445-469, 2016

One of the most striking consequences of the recent episode of sovereign debt market stress in the Eurozone has been the increase in the share of public debt held by the domestic sector in fragile economies. However, the causes and potential consequences of this increase were only given scarce attention in the literature on the Euro area sovereign debt crisis. In order to fill this gap, we first determine the shocks that impact the variation in the share of sovereign debt held at home in an SVAR model on a sample of Eurozone countries between 2002 and 2014, distinguishing between external and domestic shocks. Thanks to several alternative tests, we show that home bias in sovereign debt responds positively to country-specific fundamentals and expectation shocks but we find no evidence that the increase in home bias is destabilizing per se in the short-run. Second, a stylized theoretical model backed by the empirical results predicts that the consequences for sovereign debt crisis depend on the relative impact of domestic initial destabilizing shocks and increased home bias. The analysis suggests that an increase in home bias in times of sovereign debt stress, despite reflecting deteriorating fiscal conditions, may make default less likely.

What Drives European Football Clubs’ Stock Returns and Volatility?Journal articleCéline Gimet et Sandra Montchaud, International Journal of the Economics of Business, Volume 23, Issue 3, pp. 351-390, 2016

The article studies the main determinants of European football clubs’ stock returns and volatility. A panel-data analysis of a sample of 24 European football clubs was conducted to test the influence of several variables, based on a matrix of internal/external and real/financial dimensions, on both stock returns and their volatility. The results show that clubs’ stock returns are influenced by the real and financial context and by a set of internal variables such as profit considered as a reflection of accounting discipline, capitalization as an indicator of size and stadium attendance as a proxy indicator of reputation. The volatility of stock returns seems particularly vulnerable to the overall instability on stock markets and dependent on clubs’ profit and net players’ transfers and, to a lesser extent, on sporting outcomes.

Social upgrading in globalized production: The case of the textile and clothing industryJournal articleCéline Gimet, Bernard Guilhon et Nathalie Roux, International Labour Review, Volume 154, Issue 3, pp. 303-327, 2015

Vertical specialization generated by the international fragmentation of production within global networks is driven not only by comparative advantage, but also by the locational decisions of lead firms which determine the role and bargaining power of local producers in their value chain. This study examines the consequences of such specialization in textiles and clothing for 26 labour-abundant countries from 1990 to 2007. Fixed effects regressions based on panel data reveal that the industry does not always reap the benefits of the resulting international trade integration. Rather, the authors observe a negative relationship between vertical specialization and relative real wages in the textile and clothing industry.

Production mondialisée et progrès social: le cas du textile et de l'habillementJournal articleCéline Gimet, Bernard Guilhon et Nathalie Roux, Revue internationale du Travail, Volume 154, Issue 3, pp. 337-362, 2015

Résumé La fragmentation de la production au sein de réseaux mondiaux n'obéit pas seulement à l'avantage comparatif, mais aussi aux décisions de localisation des entreprises dominantes en fonction de la capacité de négociation des producteurs locaux et du rôle qu'elles leur assignent dans la chaîne de production. Les auteurs examinent les conséquences de cette spécialisation dans le textile et l'habillement, pour vingt-six pays où l'offre de main-d'œuvre est abondante, sur la période 1990–2007. L'étude économétrique montre que le secteur ne tire pas toujours bénéfice de l'intégration commerciale: on observe plutôt une association négative entre spécialisation verticale et salaires réels.

Progreso social y producción mundializada. El caso del sector de los textiles y el vestidoJournal articleCéline Gimet, Bernard Guilhon et Nathalie Roux, Revista Internacional del Trabajo, Volume 134, Issue 3, pp. 331-356, 2015

Resumen La especialización vertical generada por la fragmentación de la producción en redes mundiales no solo está motivada por la ventaja comparativa, sino también por las estrategias de deslocalización de las empresas líderes, que determinan el papel y el poder negociador de los productores locales. Este estudio examina las consecuencias de tal especialización en los textiles y el vestido en 26 países con abundante mano de obra de 1990 a 2007. Las regresiones de efectos fijos con datos de panel revelan que el sector no siempre gana con la integración comercial internacional: se observa una correlación negativa entre la especialización vertical y los salarios reales relativos.

Quel régime monétaire pour les émergents après la normalisation ?Journal articleAndré Cartapanis et Céline Gimet, Revue d'économie financière, Volume n° 119, Issue 3, pp. 251-266, 2015

Pour les économies émergentes, le retour annoncé à des politiques monétaires conventionnelles aux États-Unis, qui se traduira par une remontée des taux directeurs américains et une réduction de la liquidité globale, pose la question du régime monétaire qu’adopteront ces pays pour assurer une croissance stable sans instabilité financière dans la période d’après-crise. Par régime monétaire, on entend la combinaison des règles de politique monétaire, des objectifs de stabilité financière et du choix d’un régime de change. Après avoir examiné le régime monétaire des émergents face aux politiques monétaires non conventionnelles depuis la crise, on s’intéresse aux spillovers internationaux provoqués par la politique monétaire américaine, avant d’analyser les divers dilemmes ou trilemmes entre lesquels devront arbitrer les banquiers centraux des pays émergents pour définir leur régime monétaire après la normalisation.Classification JEL : E58, F31, F33, F38, O16.

Endogenous Fragility in Microfinance: Evidence from IndiaBook chapterCéline Gimet et Thomas Lagoarde-Segot, Philip Phan (Eds.), 2014, pp. 63-88, Imperial College Press, 2014

The following sections are included:
•Microfinance and Economic Development
•Indian Microfinance and the Impact of Commercialization
•Minsky's “Financial Instability” Hypothesis
•Data and Econometric Methodology
•Results and Policy Implications

Global crisis and financial destabilization in ASEAN countries: a microstructural perspectiveJournal articleCéline Gimet et Thomas Lagoarde-Segot, Journal of the Asia Pacific Economy, Volume 16, Issue 3, pp. 294-312, Forthcoming

This article investigates whether the ongoing financial crisis has destabilized the microstructures of Association of Southeast Asian Nations (ASEAN) stock markets. Using daily stock market data from 2007 to 2010, we first develop a set of monthly country-level liquidity, efficiency, international integration and volatility indicators. We then analyze the impact of global market volatility shocks on those indicators, using a set of Bayesian structural vector autoregression (SVAR) models. Finally, forecast error variance decomposition analysis and impulse response function permit to identify the magnitude and the symmetry of ASEAN financial systems’ exposures to international shocks. Our results uncover significant and asymmetrical shock transmission channels. We draw implications for the design of future regional integration initiatives.

Endogenous Fragility in Microfinance: Evidence from IndiaBook chapterCéline Gimet et Thomas Lagoarde-Segot, May 21, 2013, pp. 63-88, IMPERIAL COLLEGE PRESS, Forthcoming
The impacts of standard monetary and budgetary policies on liquidity and financial markets: International evidence from the credit freeze crisisJournal articleMarie-Hélène Gagnon et Céline Gimet, Journal of Banking & Finance, Volume 37, Issue 11, pp. 4599-4614, Forthcoming

This paper evaluates the domestic and international impacts of lowering short-term interest rates and increasing budget spending on several indicators of liquidity, volatility, credit and economic activity. Data from the 2003–2011 period in the United States, the Euro zone and Canada were used to develop two SVAR models for assessing the national effectiveness and the international spillovers of monetary and budgetary policies during the credit freeze crisis. While monetary policies caused a temporary decrease in volatility and increase in liquidity in North American stock markets, the shocks were mainly domestic and ineffective at generating liquidity in the banking sector. In contrast, government spending shocks had a positive impact on credit and consumption, especially in Europe and Canada. Moreover, budgetary policies also had a positive international spillover effect on consumption and credit, especially for smaller economies such as Canada.

Conditions necessary for the sustainability of an emerging area: The importance of banking and financial regional criteriaJournal articleCéline Gimet, Journal of Multinational Financial Management, Volume 17, Issue 4, pp. 317-335, Forthcoming

The last financial crises have revealed the vulnerability of many emerging countries. Yet, within an economically integrated area, some groups of countries have been spared the disastrous consequences of these crises. The purpose of this article is to underline the similarities between these countries in order to draw up a set of regional criteria that would protect an area against speculative attacks. Using a probit analysis, we show that the convergence of some banking and financial indicators towards reference levels guarantees the confidence of international lenders, which in turn limits financial contagion. A narrow margin between the amount of external debt, in particular the short-term debt of the country and a reference level constitutes a protection against the risk of illiquidity. Similarly, a low domestic credit in comparison with the international reserves of the economy is also an indicator of the sustainability of an area for international lenders that ensures its stock exchange stability.