Documents de travail

As large language models (LLMs) become integrated to decision-making across various sectors, a key question arises: do they exhibit an emergent “moral mind” — a consistent set of moral principles guiding their ethical judgments — and is this reasoning uniform or diverse across models? To investigate this, we presented about forty different models from the main providers with a large array of structured ethical scenarios, creating one of the largest datasets of its kind. Our rationality tests revealed that at least one model from each provider demonstrated behavior consistent with stable moral principles, effectively acting as approximately optimizing a utility function encoding ethical reasoning. We identified these utility functions and observed a notable clustering of models around neutral ethical stances. To investigate variability, we introduced a novel non-parametric permutation approach, revealing that the most rational models shared 59% to 76% of their ethical reasoning patterns. Despite this shared foundation, differences emerged: roughly half displayed greater moral adaptability, bridging diverse perspectives, while the remainder adhered to more rigid ethical structures.

This paper studies dynamic contracts in illegal addictive markets where individuals’ tastes for addictive goods develop through prolonged consumption and contract enforcement is limited. Our theoretical analysis uncovers the optimality of a ‘freefirst- dose’ strategy where sellers intensify buyers’ addiction by offering consumption credit to newcomers. We show that buyers default a certain portion of the debts for early period consumption but are never imposed any penalty on the equilibrium path. This implies that illegal markets might favor non-violent interactions over violent ones, defying the stereotypical association of illegality with violence. Meanwhile, in illegal gambling markets, a distinct equilibrium phenomenon known as the long-shot bias emerges due to the influence of addiction, illustrating another complex dynamic within these markets. We discuss the implications of the model in the context of illegal sports wagering, narcotics, and religious sects.

When estimated from survey data alone, the distribution of high incomes in a population may be misrepresented, as surveys typically provide detailed coverage of the lower part of the income distribution, but offer limited information on top incomes. Tax data, in contrast, better capture top incomes, but lack contextual information. To combine these data sources, Pareto models are often used to represent the upper tail of the income distribution. In this paper, we propose a Bayesian approach for this purpose, building on extreme value theory. Our method integrates a Pareto II tail with a semi-parametric model for the central part of the income distribution, and it selects the income threshold separating them endogenously. We incorporate external tax data through an informative prior on the Pareto II coefficient to complement survey micro-data. We find that Bayesian inference can yield a wide range of threshold estimates, which are sensitive to how the central part of the distribution is modelled. Applying our methodology to the EU-SILC micro-data set for 2008 and 2018, we find that using tax-data information from WID introduces no changes to inequality estimates for Nordic countries or The Netherlands, which rely on administrative registers for income data. However, tax data significantly revise survey-based inequality estimates in new EU member states.

Endogenous uncertainty acts as an aggregate-demand amplification mechanism of supply shocks. Using U.S. data, we first stress that taking into account time-varying macroeconomic uncertainty leads to a significantly stronger recession and less inflationary pressures, in response to a TFP shock. In addition, we show empirically that households’ misperception increases during recessions. To rationalize these findings, we build a noisy-information New- Keynesian model where the precision of signals increases with economic activity. Pro-cyclical precision of information gives rise to an amplified precautionary saving behavior. A fullfledged model parametrized by using consumer-based forecast errors generates a demandlike recession of supply shock.

In the literature on secular stagnation, demographic aging is widely blamed for lowering the IS curve of aggregate demand and therefore the natural interest rate. However, very little is said about the impact of workforce aging on long-term aggregate supply, or so-called potential GDP. To fill this gap, this study delves into the effects of workforce aging on two key components of the remarkably sluggish potential GDP growth of developed countries: hours worked and labour productivity. First, using a novel macro-accounting decomposition of EU-KLEMS data, we find that old-labour input has the highest contribution to growth, through both increased hours worked and shifts in labour composition in the EU, US and Japan. Second, we use panel stochastic frontier models highlighting that, however, old workers have an adverse effect on labour productivity growth frontier—though increasing technical efficiency, i.e., reducing the distance to this frontier.

I consider an electoral competition model where each candidate is associated with an exogenous initial position from which she can deviate to maximize her vote share, a strategy known as flip-flopping. Citizens have an intrinsic preference for consistent candidates, and abstain due to alienation, i.e. when their utility from their preferred candidate falls below a common exogenous threshold (termed the alienation threshold). I show how the alienation threshold shapes candidates’ flip-flopping strategy. When the alienation threshold is high, i.e. when citizens are reluctant to vote, there is no flip-flopping at equilibrium. When the alienation threshold is low, candidates flip-flop toward the center of the policy space. Surprisingly, I find a positive correlation between flip-flopping and voter turnout at equilibrium, despite voters’ preference for consistent candidates. Finally, I explore alternative models in which candidates’ objective function differs from vote share. I show that electoral competition can lead to polarization when candidates maximize their number of votes.

Motivated by recent examples, this study proposes a dynamic multistage optimal control problem to explain the instability of International Fishery Agreements (IFAs). We model two heterogeneous countries that exploit shared fishery resources, and investigate the conditions that lead to a shift from cooperation to competition. We assume that countries differ in their time preferences, initially behave as if the coalition will last indefinitely, use fixed sharing rules during cooperation, and adopt Markovian strategies after withdrawal. Our findings reveal that, for any sharing rule, coalitions of heterogeneous players always break down in finite time. We use the dynamic Shapley Value to decompose the coalition’s aggregate worth over time, thereby eliminating the incentive to leave the agreement. Additionally, we show that a fishing moratorium policy accelerates the recovery of near-extinct fish stocks; however, fishing should resume under a cooperative regime once sustainable levels are achieved.

This paper provides a macroeconomic explanation for the United States suffering from a health disadvantage relative to other rich European countries despite spending much more on health care. We introduce health capital à la Grossman in the neoclassical growth model and assume that its rate of depreciation increases with labor supply. The steady-state share of GDP devoted to health expenditure increases with labor supply, but the relationship between the health capital stock and the number of hours worked is hump-shaped, meaning that there is a country-specific health-maximizing level. We calibrate the model to the United States and assess how much of this ‘American Health Puzzle’ can be explained by the greater number of hours American workers work. Higher labor supply in the US accounts for 2 to 3 percentage points in extra health expenditure as a share of GDP and between 10% and one-third of the American health disadvantage.

This paper assesses whether and how setting up a sovereign wealth fund has a buffer effect against currency crises. Using an innovative dynamic logit
panel model framework and a unique dataset covering 34 emerging countries over the period 1989–2019, we empirically show that sovereign wealth funds
reduce the occurrence of currency crises. This result is robust to different econometric specifications, alternative definitions of sovereign wealth funds, controlling for currency crisis risk factors, and income level sampling. Our findings have important implications for financial stability and for policymakers, who could further exploit the potential of sovereign wealth funds to better manage foreign exchange risks.

We analyze the impact of the COVID-19 outbreak on classroom peer relationships using a unique field dataset collected from 3rd and 4th-grade students in Turkey. Using data from both pre-pandemic and pandemic cohorts, we find significant changes in social interactions among the pandemic cohort after prolonged school closures. We observe varying effects contingent upon the nature of peer relationships. While friendship relationships deteriorated, some facets of academic support relationships among classmates display enhancement. However, this progress is exclusively observed among native students, as opposed to refugees. Additionally, we uncover significant improvements in inter-ethnicity and inter-gender relationships in classrooms after COVID-19.

In this paper, we bring fresh evidence on the city size distribution from a ‘lab’ represented by the region of Bukhara observed in the 9th CE. At that time this region was homogeneous in all respects (technology, amenities, climate, culture, language, religion, etc.) and yet cities had different sizes. We rationalize the city size distribution of this economy in a simple general equilibrium spatial model of which we estimate the parameters using the method of moments. The estimated model predicts very well the 9th century city size distribution. Spatial centrality is the major determinant of city size. The silk road contributes to explain what centrality cannot. We find little evidence of persistence of the urban structure when comparing the 9th and the 21st century. We find instead that centroid of the region has moved towards the economic core of the Uzbek economy.

Across countries, women and men allocate time differently between market work, domestic services, and care work. In this paper, we document the gender division of work,
drawing on a new harmonized data set that provides us with high-quality time use data for 50 countries spanning the global income distribution. A striking feature of the data is the wide dispersion across countries at similar income levels. We use these data to motivate a macroeconomic model of household time use in which country-level allocations are shaped by wages and a set of “wedges” that resemble productivity, preferences, and disutilities. Taking the model to country-level observations, we find that a wedge related to the disutility of market work for women plays a crucial role in generating the observed dispersion of outcomes, particularly for middle-income countries. Variation in the division of non-market work is principally shaped by a wedge indicating greater disutility for men, which is especially large in some low- and middle-income countries.

The Airplane Carbon Barter (ACB) mechanism is a sort of Personal Carbon Trading (PCT) system for allocating emissions allowances to French air travelers, combined with a barter mechanism at the shadow carbon price of €100 in the first year, and following the price growth trajectory defined in the Quinet II report for the following years. Based on the latest available data, each French citizen would have an emission allowance of 0.4 tons of carbon in the first year. The modus operandi is similar to a Covid-type app, with a QR code required at check-in by airlines to obtain a boarding pass. The personal carbon account is reserved for French nationals or residents of France. We estimate that the TCA could lead to a 6% reduction in total emissions in the first year, for a market exchange value of around €1.5 billion. The TCA is also a transfer mechanism that redistributes purchasing power essentially from the last decile to the first decile, which could increase its purchasing power by 0.5%. We also propose a variant of the ACB mechanism to make it consistent with the EU-ETS.

This paper develops an overlapping generations model that links a public health system to a pay-as-you-go (PAYG) pension system. It relies on two assumptions. First, the health system directly finances curative health spending on the elderly. Second, public pensions partially depend on health status by introducing a component indexed to society's average level of old-age disability. Reducing the average disability rate in the economy then lowers pension benefits as the need to finance long-term care services also drops. We study the effects of introducing such a 'comprehensive' Social Security system on individual decisions, capital accumulation, and welfare. We first show that health investments can boost savings and capital accumulation under certain conditions. Second, if individuals are sufficiently concerned with their health when old, it is optimal to introduce a health-dependent pension system, as this will raise social welfare compared to a system where pensions are not tied to the society's average level of old-age disability. Our analysis thus highlights an important policy recommendation: making PAYG pension schemes partially health-dependent can be beneficial to society.

This paper derives closed-form solutions for a strategic, simultaneous harvesting in a predator-prey system. Using a parametric constraint, it establishes the existence and uniqueness of a linear feedback-Nash equilibrium involving two specialized fleets and allow for continuous time results for a class of payoffs that have constant elasticity of the marginal utility. Theses results contribute to the scarce literature on analytically tractable predator-prey models with endogenous harvesting. A discussion based on industry size effects is provided to highlight the role played by biological versus strategic interactions in the multi-species context.

Can forced sterilization programs targeting men lead to male-perpetrated violence? This paper investigates the impact of a government-mandated male sterilization program introduced in India on the rise of violence. Launched in April 1976, the program predominantly targeted men and saw heterogeneous implementation across India over 10 months. Using various household surveys and newly digitized historical data sources, we study whether the program triggered unintended effects on violence, measured by crime rates. Using a difference-indifferences strategy by exploiting geographical variation in coercion intensity, we find that an increase in exposure to the program led to an increase in violent crime rates of 7% for the average district, which persisted over time. Violent crimes against women primarily drive the increase in crime rates, as rapes are increasing by 22% for the average district. We find that the program was ineffective in reducing fertility, so we hypothesize that a forced sterilization program targeting men may increase violence against women through two main channels: the program inducing trauma and impacting perceptions of masculinity. In line with those channels, we see that districts with high coercion intensity correlate with more harmful gender norms: higher levels and acceptance of Intimate Partner Violence, lower bargaining power of women and lower contraception adoption.

This paper shows how to recover behavioral biases from revealed preference ranking implied by choices. The approach formalizes and unifies well-known behavioral models, including salience thinking, inattention, and logarithmic perception, thereby accounting for many well-documented choice puzzles. I show that this approach provides a way to filter out choice data from behavioral biases explaining rationality breaches before fitting parametric utility models. The approach is applied to workhorse data sets of the literature on choice under risk and scanner consumer choices.

This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a "two-period, S-state" model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real-time-pricing contract. All these elements matter in the efficiency assessment of these policies.

This paper computes lifetime earnings (LTE) in France for the 1967 to 1987 entry cohorts and compares our results with the US. Median LTE in France increased moderately for both genders, in contrast to the US where men's LTE declined and women's rose sharply. We also examine some of the factors driving the dynamics of LTE in France. We find that education plays a key role in shaping LTE across cohorts, place of birth has a large influence on lifetime earnings, and differences in working time explain a larger share of the gender gap for younger than for older cohorts.

The Balassa-Samuelson effect is still an important phenomenon in the theory of economic development, as Balassa states, "As economic development is accompanied by greater inter-country differences in the productivity of tradable goods, differences in wages and service prices increase, and correspondingly so do differences in purchasing power parity and exchange rates." To the best of our knowledge, the Balassa-Samuelson effect has not been formally examined in the framework of optimal growth theory. By embedding the Balassa-Samuelson’s original model in an optimal growth model setting, we investigate the validity of the Balassa-Samuelson effect in such a case and show that the Balassa-Samuelson effect follows from one of the properties of the optimal steady state.

The Balassa-Samuelson effect ("BS effect") has attracted attention as a theory to explain the stagnation of the Japanese economy over the past 30 years. In particular, it has been used to explain the long-term depreciation of the real effective exchange rate since 1995. Furthermore, macroeconomic data show that the BS effect explains well Japan's long-term economic stagnation. However, the BS effect was originally derived theoretically for small open economies, not for large economies like Japan. In other words, the BS effect cannot be theoretically applied to large economies. This is a serious problem in applying the BS effect empirically. In this paper, we embed Balassa-Samuelson's original argument into the optimal growth theory framework. That is, we set up an optimal growth problem for large countries. It is then shown that there exists a stable optimal steady state and that the BS effect is more directly valid in that optimal steady state. In other words, as a long-run property, the BS effect is applicable to large as well as small countries, although, contrary to the small open economy case, it does not depend on the capital shares of the two sectors.

When can exogenous changes in beliefs generate endogenous fluctuations in rational expectation models? We analyze this question in the canonical one-sector and two-sector models of the business cycle with increasing returns to scale. A key feature of our analysis is that we express the uniqueness/multiplicity condition of equilibirum paths in terms of restrictions on five critical and economically interpretable parameters: the Frisch elasticities of the labor supply curve with respect to the real wage and to the marginal utility of wealth, the intertemporal elasticity of substitution in consumption, the elasticity of substitution between capital and labor, and the degree of increasing returns to scale. We obtain two clear-cut conclusions: belief-driven fluctuations cannot exist in the one-sector version of the model for empirically consistent values for these five parameters. By contrast, belief-driven fluctuations are a robust property of the twosector version of the model-with differentiated consumption and investment goods-, as they now emerge for a wide range of parameter values consistent with available empirical estimates. The key ingredients explaining these different outcomes are factor reallocation between sectors and the implied variations in the relative price of investment, affecting the expected return on capital accumulation.

Ob jectives: To analyse how general practitioners (GPs) respond to insucient GP supply in their practice area in terms of quantity and quality of care, and how this response can be mediated by enrolment in integrated primary care teams (multi-professional group practices (MGP)).
Methods: We used three representative cross-sectional surveys (2019-2020) of 1,209 French GPs. Using structural equations, we assumed that low GP density inuences GPs' work-related stress (mediator 1) as well as their use of e-health tools (mediator 2) and ultimately quantity and quality of care. Quantity (respectively quality) of care were approximated by demand absorption capacities (respectively frequencies of vaccine recommendations). We estimated an additional specication where enrolment in an MGP was a mediator between GP density and the two mediators dened above.
Results: GP density was signicantly and positively associated with work-related stress, which was consecutively associated with deteriorated demand absorption capacity. Higher use of e-health tools was associated with greater involvement in vaccine recommendations. Lastly, GPs in MGP tend to use more e-health tools than those practicing outside MGP, with a favourable eect on quality of care.
Discussion: This study demonstrates that a lower level of work-related stress is the key mediator in handling patients' requests. Correcting for the self-selection into MGP, we amend some unstable results contained in the literature: there is no signicant mediation eect of enrolment in integrated primary care teams on the quantity of care, but rather an eect on the quality of care. Although probably disappointing for the quantity of care provided, our results pinpoint a novel added value of enrolment in an integrated practice as a response to decreasing GP density.

Aims: we propose a sociotechnical taxonomy for the analysis of socioeconomic disruptions caused by technological innovations. Methodology: a transdisciplinary principled approach is used to build the taxonomy through categorization and characterization of technologies using concepts and definitions originating from cybernetics, occupational science, and economics. The sociotechnical taxonomy is then used, with the help of logical propositions, to connect the characteristics of different categories of technologies to their socioeconomic effects, for example their externalities. Results: we offer concrete illustrations of concepts and uses, and an Industry 5.0 case study as an application of the taxonomy. We suggest that the taxonomy can inform the analysis of opportunities and risks related to technological disruptions, specially of those that result from the rise of cognitive machines.

Higher uncertainty about trade policy has recessionary effects in U.S. states. First, this paper builds a novel empirical measure of regional trade policy uncertainty, based on the volatility of national import tariffs at the sectoral level and the sectoral composition of imports in U.S. states. We show that a state which is more exposed to an unanticipated increase in tariff volatility suffers from a larger drop in real output and employment, relative to the average U.S. state. We then build a regional open-economy model and we argue that the transmission channels of uncertainty shocks, in particular the precautionary-pricing channel, are magnified in regions that feature the highest import share and a strongest export intensity. Furthermore, we show that an expansionary monetary policy may amplify the regional divergence since it worsens the recession in the most-exposed region to trade policy uncertainty.

Revolutions are often perceived as the key event triggering the fall of an autocratic regime. They are believed to be driven by the people with the purpose of establishing a democratic regime for the people. However, the historical record does not agree with this picture: revolutions are rare, elite-driven, and often non-democratising. We first develop a new set of stylised facts summarising and deepening the latter features. Second, to explain these facts, we develop a theory of elite-driven non-democratising institutional changes triggered by popular uprisings. Our model includes four key ingredients: (i) a minority/majority split in the population; (ii) the persistence of fiscal particularism post-revolution; (iii) the presence of windfall resources; (iv) a distinction between labour income and resource windfalls as well as endogeneity of the labour supply. We show that revolutions are initiated by the elite and only when fractionalisation is moderate. Resource windfalls and labour market repression can also play a role in triggering this 'alliance' between the majority and the elite. If a revolution happens, redistribution in the subsequent regime still favours the elite, although the masses are better off.

We consider public goods games played on a potentially non-symmetric network and provide comparative statics results on individual and aggregate contributions, as well as on the effect of transfers between players. We show that, contrary to the case of the complete and symmetric network, a positive shock on a player can have adverse consequences. First, it could actually decrease this player's contribution, unless the interaction matrix is a P-matrix. Second, a positive shock on a contributing player increases aggregate contributions, but a positive shock on a non-contributing player will decrease aggregate contributions, even if the player who benefited from the positive shock increases his own contribution. In each case we provide simple conditions to determine whether a positive shock will have positive or negative consequences on contributions, by looking at the unconstrained solution of an alternative, associated game. The sign of the coordinates of this solution determines the effect of a shock. With this in hand, we further show that the aggregate neutrality result of Andreoni [1990] regarding transfers between players generally does not hold on non-symmetric networks and provide conditions for it to hold. Finally, as an application of previous results, we consider introducing agents that follow Kantian moral principles and show that, depending on their position in the network, the presence of Kantian agents can, counter-intuitively, lead to a decrease in aggregate contributions.

Several representativeness issues affect the available data sources in studying populations' income distributions. High-income under-reporting and non-response issues have been evidenced to be particularly significant in the literature, due to their consequence in underestimating income growth and inequality. This paper bridges several past parametric modelling attempts to account for high-income data issues in making parametric inference on income distributions at the population level. A unified parametric framework integrating parametric income distribution models and popular data replacing and reweighting corrections is developped. To exploit this framework for empirical analysis, an Approximate Bayesian Computation approach is developped. This approach updates prior beliefs on the population income distribution and the high-income data issues pressumably affecting the available data by attempting to reproduce the observed income distribution under simulations from the parametric model. Applications on simulated and EU-SILC data illustrate the performance of the approach in studying population-level mean incomes and inequality from data potentially affected by these high-income issues.

As physics provides the equations of motion of a body, this paper formulates, for the first time, at the conceptual and mathematical levels, the inequations of motion of an individual seeking to meet his needs and quasi needs in an adaptive (not myopic) way. Successful (failed) dynamics perform a succession of moves, which are, at once, satisficing and worthwhile (free from too many sacrifices), or not. They approach or reach desires (fall in traps). They balance the desired speed of approach to a desired end (a distal promotion goal) with the size of the required immediate sacrifices to go fast (a proximal prevention goal). Therefore, each period, need/quasi need satisfaction success requires enough self control to be able to make, in the long run, sufficient progress in need/quasi need satisfaction without enduring, in the short run, too big sacrifices. A simple example (lose or gain weight) shows that the size of successful moves must be not too small and not too long. A second paper will solve this problem, using variational principles and inexact optimizing algorithms in mathematics. This strong multidisciplinary perspective refers to a recent mathematical model to psychology: the variational rationality theory of human life stay and change dynamics.

This paper provides a general and formalized theory of self-regulation success and failures as an application of the recent Variational rationality approach of stay and change human dynamics (Soubeyran, 2009, 2010, 2021.a,b,c,d). For concreteness purposes, it starts with an example in psychology: how to gain or to loose weight ? It ends with a general, conceptual, dynamical and computable formulation of self-regulation and goal pursuit in the context of variational principles and adaptive optimizing algorithms in mathematics.

We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace.

Macroeconomic models in which exogenous, self-fulfilling changes in expectations play a significant role in output fluctuations are often discarded on two claims: they require implausible calibrations of structural parameters and they are enable to account for several empirical features associated with demand shocks. We show that these claims are only valid to the extent that they are applied to one-sector models. In contrast, we prove that two-sector models allow the existence of self-fulfilling prophecies for a large set of empirically realistic values for all the structural parameters, and that a two-sector model submitted to sunspot shocks can account not only for all the standard stylized facts associated with demand shocks, but also for other dimensions of the business cycle that standard RBC-type models cannot explain.

This paper shows how ethnic identities may become more salient due to natural resources extraction. We combine individual data on the strength of ethnic-relative to national-identities with geo-localized information on the contours of ethnic homelands and on the timing and location of mineral resources exploitation in 25 African countries, from 2005 to 2015. Our strategy takes advantage of several dimensions of exposure to resources exploitation: time, spatial proximity, and ethnic proximity. We find that the strength of an ethnic group identity increases when mineral resource exploitation in that group's historical homeland intensifies. We argue that this result is at least partly rooted in feelings of relative deprivation associated with the exploitation of the resources. We show that such exploitation has limited positive economic spillovers, especially for members of the indigenous ethnic group; and that the link between mineral resources and the salience of ethnic identities is reinforced among members of powerless ethnic groups, and groups with strong baseline identity feelings or living in poorer areas, or areas with a history of conflict. Put together, these finding suggest a new dimension of the natural resource curse: the fragmentation of identities, between ethnic groups and nations.

We analyse preference for redistribution and the perceived role of “circumstances” and “effort” in China within the framework of the belief in a just world hypothesis (BJW) using the 2006 CGSS. As this very rich data base does not include Dalbert questionnaire on GBJW and PBJW, we have completed the CGSS by a survey led during the COVID episode in Shanghai and Nanjing. Thanks to this new survey, we could identify the components of PBJW and GBJW inside the traditional opinion variables about the causes of poverty and the desire for redistribution of the CGSS. Using a tri-variate ordered probit model for explaining opinions, we show how treating the decision to migrate as an endogenous variable modifies the usual results of the literature concerning migrants and the effects of the Hukou status. The correlations found validate the distinction between personal BJW and general BJW, a distinction that has important policy implications for the status of migrants.

In this paper, I introduce a novel methodology to conduct surveys. The priced survey methodology. Like standard surveys, priced surveys are easy to implement, and measure invisible assets such as feelings, happiness, knowledge, views, and attitudes on numerical scales. Unlike standard surveys, priced surveys allow to leverage decades of research on revealed preference and consumer demand in the analysis of invisible assets.

This paper studies the transmission of a sovereign debt crisis in which a shift in default risk generates a recession and gives rise to a doom loop between sovereign distress and bank fragility with important amplification effects. The model is used to investigate the macroeconomic and welfare effects of altering debt maturity during the crisis. Short-term maturities alleviate the bankers' losses on long-term bonds and moderate the recession at the cost of higher levels of debt in the future. In contrast, long-term maturities are more effective to reduce the households' welfare losses as they lower default risk and distortionary taxes.

The effects of the COVID-19 pandemic led many governments to suspend their fiscal rules to gain additional fiscal space to mitigate the social and economic consequences of the health crisis. As a result, the return and subsequent compliance with fiscal rules have been compromised, and the opportunity to improve them and consider the new global macroeconomic conditions has emerged. Understanding what elements relate to increased compliance with the rules and what has worked and has not can shed light on upcoming reforms. This paper uses an empirical model to investigate Latin American countries' factors influencing numerical compliance with fiscal rules. We associate three groups of specific factors with a greater or lesser probability of compliance with the rule: the macroeconomic and political environment of the countries and the design features of the enforced rules. We find that only changes in the macroeconomic and political context are associated with higher levels of compliance. In contrast, the institutional design of the fiscal rules does not seem to play an essential role in the compliance outcome. This result suggests that adjustments in this direction are not decisive for rule compliance.

We use a distinctive methodology that leverages a fixed population of Twitter users located in France to gauge the mental health effects of repeated lockdown orders. To do so, we derive from our population a mental health indicator that measures the frequency of words expressing anger, anxiety and sadness. Our indicator did not reveal a statistically significant mental health response during the first lockdown, while the second lockdown triggered a sharp and persistent deterioration in all three emotions. Our estimates also show a more severe deterioration in mental health among women and younger users during the second lockdown. These results suggest that successive stay-at-home orders significantly worsen mental health across a large segment of the population. We also show that individuals who are closer to their social network were partially protected by this network during the first lockdown, but were no longer protected during the second, demonstrating the gravity of successive lockdowns for mental health.

This paper analyzes the impact of fiscal spending shocks in a dynamic, multi-country model with international production networks. We first derive a decomposition of the effects of a fiscal spending shock on the GDP of any country. This decomposition defines the response as the sum of a Direct, Income, and Price effect. The Direct Effect depends only on structural parameters and is independent of assumptions about monetary policy, wage setting, or capital mobility, while the Price Effect is zero in the aggregate across countries. We apply this decomposition to an analysis of fiscal spillovers in the Eurozone, using the production network structure from the World Input Output Database (WIOD). We find that fiscal spillovers from Germany and some other large Eurozone countries may be large, and within the range of empirical estimates. Without international production network linkages, spillovers would be only a third as large as predicted by the baseline model. Finally, we explore the diffusion of identified government spending shocks at the sectoral level, both within and across countries, using an empirical measure of the response, based on the theoretical decomposition. The empirical estimates are strongly consistent with the theoretical model.

Large-scale analyses to map interactions between financial health at the sectoral level are still scarce. To fill the gap, in this paper, I map a network of predictive relationships across the financial health of several sectors. I provide a new advanced indicator to track propagation of financial distress across industries and countries on a monthly basis. I use defaults on trade credit as a measure of firms’ worsening financial conditions in a sector. To control for omitted-variable bias, I apply a high- dimensional VAR analysis, and isolate direct cross-sector causalities `a la Granger from common exposure to macroeconomic shocks or to third-sector shock. I show that monitoring some key sectors–among which construction, wholesale and retail, or the automotive sector–can improve the detection of financial distress in other sectors. Finally, I find that those financial predictive relationships correlates with the input-output structure in the considered economies. Such structure of financial interactions reflect the propagation of financial distress along the supply chain.

We provide a novel way to correct the effective reproduction number for the time-varying amount of tests, using the acceleration index (Baunez et al., 2021) as a simple measure of viral spread dynamics. Not correcting results in the reproduction number being a biased estimate of viral acceleration and we provide a formal decomposition of the resulting bias, involving the useful notions of test and infectivity intensities. When applied to French data for the COVID-19 pandemic (May 13, 2020 - October 26, 2022), our decomposition shows that the reproduction number, when considered alone, characteristically underestimates the resurgence of the pandemic, compared to the acceleration index which accounts for the time-varying volume of tests. Because the acceleration index aggregates all relevant information and captures in real time the sizable time variation featured by viral circulation, it is a more parsimonious indicator to track the dynamics of an infectious disease outbreak in real time, compared to the equivalent alternative which would combine the reproduction number with the test and infectivity intensities.

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates today forecast future booms in GDP, consumption, investment, and employment. We show that a Kiyotaki-Moore model accounts for both properties when interest-rate movements are driven, in a significant way, by self-fulfilling belief shocks that redistribute income away from lenders and to borrowers during booms. The credit-based nature of such self-fulfilling equilibria is shown to be essential: the dynamic correlation between current loanable funds rate and future aggregate economic activity depends critically on the property that the interest rate is state-contingent. Bayesian estimation of our benchmark DSGE model on US data shows that the model driven by redistribution shocks results in a better fit to the data than both standard RBC models and Kiyotaki-Moore type models with unique equilibrium.

We introduce loss aversion into a model of conspicuous consumption in networks. Agents allocate their income between a standard good and a status good to maximize a Cobb-Douglas utility. Agents interact over a connected network and compare their status consumption to their neighbors' average consumption. Loss aversion has a profound impact. If loss aversion is large enough relative to income heterogeneity, a continuum of Nash equilibria appears and all agents consume the same quantity of status good. Otherwise, there is a unique Nash equilibrium and richest agents earn strict status gains while poorest agents earn strict status losses.

This chapter discusses facts, methods and empirical results that pertain to poverty measurement under income and price dispersions. The correlation of prices and living standards is examined, and its origins are considered, in terms of whether such origins are related to consumer preferences, economic interactions and market imperfections.

Then, the relationship of price dispersion and aggregate social indicators - including poverty measures - is analysed by combining stochastic hypotheses about prices and incomes with normative properties of social and poverty indicators.

Finally, empirical results about how dispersed heterogeneous price indices affect poverty measurement, anti-poverty targeting and poverty-alleviation price reforms are reviewed.

What patterns of economic relations arise when people are altruistic rather than strategically self-interested? This paper introduces an altruism network into a simple model of choice among partners for economic activity. With concave utility, agents effectively become inequality averse towards friends and family. Rich agents preferentially choose to work with poor friends despite productivity losses. Hence, network inequality-the divergence in incomes within sets of friends and family-is key to how altruism shapes economic relations and output. Skill homophily also plays a role; preferential contracts and productivity losses decline when rich agents have poor friends with requisite skills.

We formulate a hydro-economic model of the NorthWestern Sahara Aquifer System (NWSAS) to assess the effects of intensive pumping on the groundwater stock and examine the subsequent consequences of aquifer depletion. This large system comprises multi-layer reservoirs with vertical exchanges, all exploited under open access properties. We first develop a theoretical model to account for relevant features of the NWSAS by introducing, in the standard Gisser-Sanchez model, a non-stationary demand and quadratic stock-dependent cost functions. In the second step, we calibrate parameters values using data from the NWSAS over 1955-2000. We finally simulate the time evolution of the aquifer system with exploitation under an open-access regime. We specifically examine time trajectories of the piezometric levels in the two reservoirs, the natural outlets, and the modification of water balances. We find that natural outlets of the two reservoirs might be totally dried before 2050.

Revealed and stated preference techniques are widely used to assess willingness to pay (WTP) for non-market goods as input to public and private decision-making. However, individuals first have to satisfy subsistence needs through market good consumption, which affects their ability to pay. We provide a methodological framework and derive a simple ex post adjustment factor to account for this effect. We quantify its impacts on the WTP for non-market goods and the ranking of projects theoretically, numerically and empirically. This confirms that non-adjusted WTP tends to be plutocratic: the views of the richest-whatever they are-are more likely to impact decision-making, potentially leading to ranking reversal between projects. We also suggest that the subsistence needs-based adjustment factor we propose has a role to play in value transfer procedures. The overall goal is a better representation of the entire population's preferences with regard to non-market goods.

We study how altruism networks affect the adoption of formal insurance. Agents have private CARA utilities and are embedded in a network of altruistic relationships. Incomes are subject to both a common shock and a large idiosyncratic shock. Agents can adopt formal insurance to cover the common shock. We show that ex-post altruistic transfers induce interdependence in ex-ante adoption decisions. We characterize the Nash equilibria of the insurance adoption game. We show that adoption decisions are substitutes and that the number of adopters is unique in equilibrium. The demand for formal insurance is lower with altruism than without at low prices, but higher at high prices. Remarkably, individual incentives are aligned with social welfare. We extend our analysis to CRRA utilities and to a fixed utility cost of adoption.

This paper investigates the dependence of the Option-Adjusted Spread (OAS) for several ICE BofA Emerging Markets Corporate Plus Indexes to the outbreaks of the Covid-19 viral pandemics between March 1, 2020, and April 30, 2021. We investigate whether the number of new cases, the reproduction rate, death rate and stringency policies have resulted in an increase/decrease in the spreads. We study the bivariate distributions of epidemiological indicators and spreads to investigate their concordance using dynamic copula analysis and estimate the Kendall rankcorrelation coefficient. We also investigate the effect of the epidemiological variables on the extreme values of the spreads by fitting a tail index derived from a Pareto type I distribution. We highlight the existence of correlations, robust to the type of copulas used (Clayton or Gumbel). Moreover, we show that the epidemiological variables explain well the extreme values of the spreads.

How do banking crises a ect rich, middle-class and poor households? This paper quanti es the distributional implications of banking crises for a panel of 140 economies over the 1970-2017 period. We rely on di erent empirical settings, including an instrumental variable approach, that exploit the geographical di usion of banking crises across borders. Our results show that banking crises systematically reduce the income share of rich households and positively a ect middle-class households. We also nd that income inequality increases during periods preceding the triggering of a banking crisis.

In this paper, I introduce a workable dynamic utility model on the interplay between economic actions and social roles. I model both how economic actions are embedded in social roles, and how social roles reciprocally feed back into preferences and affect economic outcomes. I also consider a set of policy interventions aimed at breaking social roles when they deteriorate economic outcomes.

Background:
Given the importance of continuous follow-up of chronic patients, we evaluated performance of French private practice general practitioners (GPs) practicing in multi-professional group practices (MGP), compared to their peers practicing outside MGP, regarding chronic care management during rst Covid-19 lockdown in spring 2020.

Methods:
The cross-sectional web questionnaire of 1,191 GPs took place in April 2020. We exploit self-reported data on: 1) frequency of consultations for chronic patients during lockdown compared to their typical week before the pandemic, along with 2) GPs proactive behaviour when contacting their chronic patients. We use probit and seemingly unrelated probit models (adjusted for endogeneity of choice of engagement in MGP) to test whether GPs in MGP had signicantly dierent responses to the Covid-19 crisis.

Results:
We nd that GPs in MGP were less likely to experience a drop in consultations related to complications of chronic diseases. They were also more proactive to contact their chronic patients.

Conclusions:
Quick policy response is needed to alleviate diculties encountered by GP practicing outside MGPs. Results advocate for further development of integrated care in the long run.

We investigate the effect of changing ENSO patterns on global commodity prices, including energy, metals/minerals and agriculture real commodity price subsets, while controlling for global economic output and interest rate via a global factor local projections (GFALP) model. We study the responses to climate shocks using a nonlinear multivariate model to assess differential effects across ENSO climate regimes. We find that commodity inflation is reactive to El Niño and La Niña events, but that this sensitivity can occur either in the short-or long-term depending on the commodity under investigation. For commodities in agriculture, we uncover an asymmetric influence of El Niño and La Niña shocks. More central banks are questioning whether climate change is part of their mission to stabilize prices. Our results indicate the existence of a direct link between weather anomalies and commodity inflation, one that should be integrated into the central banks' inflation targeting framework.

We study whether fiscal policies, especially public debt, can help to curb the macroeconomic and health consequences of epidemics. Our approach is based on three main features: we introduce the dynamics of epidemics in an overlapping generations model to take into account that old people are more vulnerable; people are more easily infected when pollution is high; public spending and public debt can be used to tackle the effects of epidemics. We show that fiscal policies can promote the convergence to a stable steady state with no epidemics. When public policies are not able to permanently eradicate the epidemic, public debt and income transfers could reduce the number of infected people and increase capital and GDP per capita. As a prerequisite, pollution intensity should not be too high. Finally, we define a household subsidy policy which eliminates income and welfare inequalities between healthy and infected individuals.

This paper examines a novel negative impact of trade tariffs and the costs they induce by documenting how protectionism reversed the long-term improvements in education and the fertility transition that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, was a major protectionist shock that shifted relative prices in favor of agriculture and away from industry. In a context in which the latter was more intensive in skills than agriculture, the tariff reduced the relative return to education, which in turn affected parents' decisions about the quantity and quality of children. We use regional differences in the importance of cereal production in the local economy to estimate the impact of the tariff. Our findings indicate that the tariff reduced enrolment in primary education and increased birth rates and fertility. The magnitude of these effects was substantial, with the tariff offsetting the increasing trend in enrolment rates and the decreasing one in birth rates by a decade.

We study the effect of legalization of same-sex marriage on coming out in the United States. We overcome data limitations by inferring coming out decisions through a revealed preference mechanism. We exploit data on enrollment in seminary studies for the Catholic priesthood, hypothesizing that Catholic priests' vow of celibacy may lead gay men to self-select as a way to avoid a heterosexual lifestyle. Using a differencesin-differences design that exploits variation in the timing of legalization across states, we find that city-level enrollment in priestly studies fell by about 15% exclusively in states adopting the reform. The celibacy norm appears to be driving our results, since we find no effect on enrollment in deacon or lay ministry studies that do not require celibacy. We also find that coming out decisions, as inferred through enrollment in priestly studies, are primarily affected by the presence of gay communities and by prevailing social attitudes toward gays. We explain our findings with a stylized model of lifestyle choice.

This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.

There is strong evidence that national leaders matter for the performance of their nations, but little is known about what drives the direction of their effects. I assess how national leaders’ quality of governance, measured by six indicators,
varies with their career and education. Using a sample of 1,000 rulers between 1931 and 2010, I identify three types of leaders: military leaders, academics, and politicians. I find that military leaders are associated with an overall negative
performance, while politicians who have held important offices before taking power tend to perform well. Academics have on average non-significant effects. These results are partially driven by differences in policy decisions and in leadership styles. Military leaders (politicians) spend less (more) in health and education, are more (less) likely to establish a personalistic regime, to disrespect the constitution, and to move towards a non-electoral regime. Additionally, this paper highlights the weakness of using educational attainment as a proxy for politicians’ quality, and of growth as a measure of national leaders’ performance.

A central idea in the institutions and development literature is whether the executive is adequately checked by the legislature and judiciary (North, 1990; Acemoglu et al., 2001; La Porta et al., 2004). This paper provides plausibly causal evidence on how increased constraints on the executive, through removal of Presidential discretion in judicial appointments, impacts judicial decision-making. In particular, we find that when the judge selection procedure in Pakistan changed, from the President appointing judges to appointments by judge peers, rulings in favor of the government decreased significantly and the quality of judicial decisions improved. The age structure of judges at the time of the reform and the mandatory retirement age law provide us with an exogenous source of variation in the implementation of the selection reform. We test for and provide evidence against potential threats to identification and alternative explanations for our findings. The analysis of mechanisms reveals that our results are explained by rulings in politically salient cases and by “patronage” judges who hold political office prior to their appointments. According to our estimates, Presidential appointment of judges results in additional land expropriations by the government worth 0.14 percent of GDP every year.

This study investigated elements affecting the ability to achieve optimal health (health capability) in people living in the rural area of Niakhar, Senegal, using data from the 12356 ANRS AmBASS survey. A structural equation modelling (SEM) strategy was used to develop a multidimensional and dynamic health capability model (Ruger, 2010) that allowed the analysis of determinants of health to be extended beyond the usual one-way study between determinants and health status found in the literature. Three factors (dimensions) were identified: 1) access to local healthcare services, 2) participation in decisionmaking, and 3) current self-reported health status. The model analyzed interactions between these dimensions as well as the dimensions' relationships with other demographic, psychosocial and economic variables (household size and resources, age, gender, education, marital status, intrinsic motivation, etc.) Results reveal a much greater diversity of variables associated with shortfalls in the various dimensions of health capability than what would have appeared had a standard unidimensional model been used. This SEM-based strategy could be an attractive alternative to traditional approaches to measure determinants of health and provide valuable empirical results for policy-makers.

We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices allowing consumers to choose their optimal electricity consumption. These contracts are modeled by a set of state-contingent electricity delivery contracts. We show existence and uniqueness of a competitive equilibrium of the contingent wholesale and retail markets. We provide a welfare analysis and only obtain constraint efficiency due to a limited number of delivery contracts. Finally, we discuss the conditions under which changing the set of delivery contracts improves penetration of renewables and increases welfare. This provides useful policy insights for managing intermittency and achieving renewable capacity objectives.

Even though much has been learned about the new pathogen SARS-CoV-2 since the beginning of the COVID-19 pandemic, a lot of uncertainty remains. In this paper we argue that what is important to know under uncertainty is whether harm accelerates and whether health policies achieve deceleration of harm. For this, we need to see cases in relation to diagnostic effort and not to look at indicators based on cases only, such as a number of widely used epidemiological indicators, including the reproduction number, do. To do so overlooks a crucial dimension, namely the fact that the best we can know about cases will depend on some welldefined strategy of diagnostic effort, such as testing in the case of COVID-19. We will present a newly developed indicator to observe harm, the acceleration index, which is essentially an elasticity of cases in relation to tests. We will discuss what efficiency of testing means and propose that the corresponding health policy goal should be to find ever fewer cases with an ever-greater diagnostic effort. Easy and low-threshold testing will also be a means to give back people’s sovereignty to lead their life in an “open” as opposed to “locked-down” society.

In this paper, I use a pseudo-panel approach with data from the European Union Labour Force Survey to study the impact of paternity leave policies on mothers' employment in ten countries. Using a dynamic Difference-inDifference strategy, I show that paternity leave increased mothers' employment rate by up to 17% in the long run, and average hours worked by 2 to 4%. There is substantial heterogeneity across countries in the effect of paternity leave policies. The impact on employment rates is positive and significant in eight of the ten countries of the sample, while the impact on hours worked can be either positive or negative. I find no evidence that the reforms had any impact on Greece or Portugal.

In the spirit of Blackwell (1951), we analyze how two fundamental mistakes in information processing-incorrect beliefs about the world and misperception of information-affect the expected utility ranking of information experiments. We explore their individual and combined influence on welfare and provide necessary and sufficient conditions when mistakes alter and possibly reverse the ranking of information experiments. Both mistakes by themselves reduce welfare in a model where payoff relevant actions also generate informative signals. This is true for naive decisionmakers, unaware of any errors, as well as for sophisticated decision-makers, who account for the possibility of mistakes. However, mistakes can interact in non-obvious ways and an agent might be better off suffering from both, rather than just one. We provide a characterization when such positive interactions are possible. Surprisingly, this holds true only for naive decision-makers and thus naivete can be beneficial. We discuss implications for information acquisition and avoidance, welfare-improving belief manipulation, and policy interventions in general.

Entrepreneurship, growth and total factor productivity are larger when there is a financial bubble. We explain these facts using a growth model with financial bubbles in which individuals face heterogeneous wages and returns on productive investment. The heterogeneity in the return of in- vestment separates individuals between savers and entrepreneurs. Savers buy financial assets, which are deposits or a financial bubble. Entrepreneurs incur in a start-up cost and borrow to invest in productive capital. The bubble provides liquidities to credit-constrained entrepreneurs. These liquidities increase investment and entrepreneurship when the start- up cost is large enough, which explains that growth and entrepreneurship can be larger with bubbles. Finally, productivity can be larger when the bubble further increases the investment of more productive entrepreneurs. This can occur when the return of investment is correlated with wages.

We estimate the demand for money for monetary aggregates M1 and M2, and cash in Algeria over the period 1979-2019, and study its long-run stability. We show that the transaction motive is significant for all three aggregates, especially for the demand for cash, reflecting the weight of informal economy “practices”. The elasticity of the scale variable is very close to unity for M2 and M1, and even equal to unity for cash demand (1.006). The elasticity of inflation is also significant for all three aggregates, although its level is higher in the case of cash demand (-6.474). Despite the persistence of certain financial repression mechanisms, interest rate elasticity is significant for all three aggregates, but higher for M1 and cash. The same observation is made for elasticity of the exchange rate, reflecting the effect of monetary substitution, especially for M1 and cash. Finally, our study concludes that the demand for money in terms of M1 remains stable, the same observation being confirmed for the M2 aggregate. However, the demand for fiat currency proves not to be stable. The consequences for the optimal design of monetary policy in Algeria are clearly stated.

Do households facing different realizations of prices rather than a simple price alter the results of poverty analyses? To address this question, we exploit a unique dataset from Niger in which agropastoral households provide the observed minimum and maximum prices they paid for each consumed product in each season. We estimate poverty measures based on this price information using several absolute poverty line methodologies. Prices are used for valuing household consumption bundles, estimating household-specific price indices, valuing minimal calorie requirements, and extrapolating the link between food poverty and consumption.
The results for Niger show statistically significant differences in the estimated chronic and dynamic poverties for these approaches, especially for international poverty comparisons and seasonal transient poverty monitoring. Specifically, using minimum and maximum prices generates gaps in the estimated poverty rates for Nigerien agropastoral households that exceed regional poverty disparities, which implies that regional targeting priorities in poverty alleviation policy would be reversed if these alternative prices are utilized.
This result suggests that typically estimated poverty statistics, which assume that each household, or even cluster, faces a unique price for each product in a given period, may be less accurate for policy monitoring than generally believed.

Cet article propose une discussion méthodologique à partir d’une évaluation économique des impacts sur la mortalité de l’exposition chronique aux particules fines en France continentale. Il prend comme point de départ l’évaluation quantitative d’impact sanitaire (EQIS), réalisée par Santé publique France en 2016, de 5 scénarios de réduction des concentrations par deux méthodes de mesure de la mortalité (nombre de décès prématurés évités et nombre total d’années de vie gagnées). Après une justification des valeurs monétaires utilisées – 3 millions € pour la valeur d’évitement d’un décès et 80 000 € pour celle d’une année de vie gagnée – nous les appliquons aux données sanitaires, et obtenons des résultats comparables aux études contemporaines. En particulier, dans un scénario sans pollution anthropique, l’EQIS de 2016 estime à 48 283 les décès prématurés évités, que nous évaluons à 144,85 milliards €₂₀₀₈. Nous questionnons ensuite les méthodes et pratiques : les sources de divergence avec la précédente étude française menée en 1998-99, le choix des valeurs monétaires et les conditions d’utilisation de ces résultats dans la décision publique. Au final, nous apportons un argument supplémentaire sur la nécessité de réduire l’exposition des populations à la pollution de l’air ambiant en France.

This paper examines the distributional e ects of monetary policy in 12 OECD economies between 1920 and 2016. We exploit the implications of the macroeconomic policy trilemma with an external instrument approach to analyse how top income shares respond to monetary policy shocks. The results indicate that monetary tightening strongly decreases the share of national income held by the top one percent and vice versa for a monetary expansion, irrespective of the position of the economy. This e ect (i) holds for the top percentile and the ultra-rich (top 0.1% and 0.01% income shares), while (ii) it does not necessarily induce a decrease in income inequality when considering the entire income distribution. Our ndings also suggest that the e ect of monetary policy on top income shares is likely to be channeled via real asset returns.

We show that the acceleration index, a novel indicator that measures acceleration and deceleration of viral spread (Baunez et al. 2020a,b), is essentially a test-controlled version of the reproduction number. As such it is a more accurate indicator to track the dynamics of an infectious disease outbreak in real time. We indicate a discrepancy between the acceleration index and the reproduction number, based on the infectivity and test rates and we provide a formal decomposition of this difference. When applied to French data for the ongoing COVID-19 pandemic, our decomposition shows that the reproduction number consistently underestimates the resurgence of the pandemic since the summer of 2020, compared to the acceleration index which accounts for the time-varying volume of tests. Because the acceleration index aggregates all the relevant information and captures in real time the sizeable time variation featured by viral circulation, it is a sufficient statistic to track the pandemic’s propagation.

This study analyses the relationship between a household member’s migration and child mortality within the family left behind in rural areas. Exploring the richness of the Niakhar Health and Demographic Surveillance System panel, we use high-frequency migration data to investigate the effects of migration on child mortality at the household level over 16 years. Migrations, particularly short-term migrations, are positively associated with the survival probability of under-five children in the household. Also, we find that working age women's short-term migrations impact child mortality more than working age men's short-term migrations. This observation supports hypotheses in the economic literature on the predominant role of women in rural households in obtaining welfare improvements. Moreover, we detect crossover effects between households of the same compound –in line with the idea that African rural families share part of their migration-generated gains with an extended community of neighbors. Lastly, we investigate the effect of a mother's short-term migration on the survival of her under-5 children. The aggregate effect of a mother’s migration on child survival is still positive, but much weaker. Specifically, mother migration during pregnancy seems to enhance the wellbeing of the child, considered immediately after birth. However, when the child is older (more than one year), the absence of the mother tends to decrease the probability of survival.

This paper provides plausibly causal evidence that Presidential appointment of judges considerably impacts judicial independence and decision quality in Pakistan. We find that when the judge selection procedure changed from Presidential appointment to appointment by peer judges, rulings in favor of the government decreased significantly and the quality of judicial decisions improved. The age structure of judges at the time of the reform and the mandatory retirement age law provide us with an exogenous source of variation in the implementation of the reform. We test for and provide evidence against potential threats to identification and alternative explanations for our findings. The analysis of mechanisms reveals that our results are explained by rulings in politically salient cases and by "patronage" judges who hold political office prior to their appointments. According to our estimates, judicial appointment by peer judges prevents land expropriations worth 0.14 percent of GDP every year.

Elite-biased democracies are those democracies in which former political incumbents and their allies coordinate to impose part of the autocratic institutional rules in the new political regime. We document that this type of democratic transition is much more prevalent than the emergence of pure (popular) democracies in which the majority decides the new political rules. We then develop a theoretical model explaining how an elitebiased democracy may arise in an initially autocratic country. To this end, we extend the benchmark political transition model of Acemoglu and Robinson (2006) along two essential directions. First, population is split into majority versus minority groups under the initial autocratic regime. Second, the minority is an insider as it benefits from a more favourable redistribution by the autocrat. We derive conditions under which elite-biased democracies emerge and characterise them, in particular with respect to pure democracies.

While the reference framework for international portfolio choice emphasizes a mean-variance framework, uncovered parity conditions only involve mean stock or bond returns. We propose to augment the empirical specification by using the relative stock market uncertainty of two countries as an extra determinant of their bilateral exchange rate returns. A rise in the relative uncertainty of one stock market will lead capital to flow to the other stock market and generate an appreciation in the currency of the latter. By focusing on the JPY/USD exchange rate returns during the most recent decade (2009-2019) and relying on a nonlinear framework, we provide evidence that the Japanese-US differential stock market uncertainty affects the JPY/USD returns both contemporaneously and with weekly lags. This finding is robust when we control for the stock returns differential and the differential changes in Japanese and US unconventional monetary policy measures.

An acceleration index is proposed as a novel indicator to track the dynamics of the COVID-19 in real-time. Using French data on cases and tests for the period following the first lock-down-from May 13, 2020, onwards-our acceleration index shows that the ongoing pandemic resurgence can be dated to begin around July 7. It uncovers that the pandemic acceleration has been stronger than national average for the [59 − 68] and [69 − 78] age groups since early September, the latter being associated with the strongest acceleration index, as of October 25. In contrast, acceleration among the [19 − 28] age group is the lowest and is about half that of the [69 − 78], as of October 25. In addition, we propose an algorithm to allocate tests among French départements, based on both the acceleration index and the feedback effect of testing. Our acceleration-based allocation differs from the actual distribution over French territories, which is population-based. We argue that both our acceleration index and our allocation algorithm are useful tools to guide public health policies as France enters a second lock-down period with indeterminate duration.

Using a new and original database, our paper contributes to the growth accounting literature with three original aspects: first, it covers a long period from the early 60's to 2019, just before the COVID-19 crisis; second, it analyses at the country level a large set of economies (30); finally, it singles out the growth contribution of ICTs but also of robots. The original database used in our analysis covers 30 developed countries and the Euro Area over a long period allowing to develop a growth accounting approach from 1960 to 2019. This database is built at the country level. Our growth accounting approach shows that the main drivers of labor productivity growth over the whole 1960-2019 period appear to be TFP, non-ICT and non-robot capital deepening, and education. The overall contribution of ICT capital is found to be small, although we do not estimate its effect on TFP. The contribution of robots to productivity growth through the two channels (capital deepening and TFP) appears to be significant in Germany and Japan in the sub-period 1975-1995, in France and Italy in 1995-2005, and in several Eastern European countries in 2005-2019. Our findings confirm also the slowdown in TFP in most countries from at least 1995 onwards. This slowdown is mainly explained by a decrease of the contributions of the components 'others' in the capital deepening and the TFP productivity channels.

Workers' propensity to migrate to another local labor market varies a lot by occupation. We use the model developed by ? to quantify the impact of mobility costs and search frictions on this mobility gap. We estimate the model on a matched employer-employee panel dataset describing labor market transitions within and between the 30 largest French cities for two groups at both ends of the occupational spectrum and find that: (i) mobility costs are very comparable in the two groups, so they are three times higher for blue-collar workers relative to their respective expected income; (ii) Depending on employment status, spatial frictions are between 1.5 and 3.5 times higher for blue-collar workers; (iii) Moving subsidies have little (and possibly negative) impact on the mobility gap, contrary to policies targeting spatial frictions.

In this paper, we contend that local segregation should be an essential component of the analyzes of the determination of socio-ethnic income gaps. For this, we adopt a thorough distribution decomposition approach, as a general preliminary descriptive step to prospective specific structural analyses. Focusing on the contemporary White/African gap in South Africa, we first complete Mincer wage equations with an Isolation index that reflects the level of segregation in the local area where individuals dwell. Second, we decompose the income gap distribution into detailed composition and structure components. Third, we explore the heterogeneity of segregation effects on wage gaps along three theoretical lines: racial preferences, labor market segmentation, and networks links. Segregation is found to be the main contributor of the structure effect, ahead of education and experience, and to make a sizable contribution to the composition effect. Moreover, segregation is harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is beneficial at the top of the White income distribution. Only minor influences of racial preferences and labor market segmentation are found. Specific subpopulations are identified that suffer and benefit most from segregation, including for the former, little educated workers in agriculture and mining, often female, immersed in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation’s noxious mechanisms.

This paper investigates the evolution of wage formation in a Mincer model with sample selection for which we develop Bayesian inference and growth incidence and poverty growth curves. We estimate the effect of an exogenous exposure to Western TV broadcasts on labour market participation and wage inequality in East Germany after the German reunification. Using the GSOEP, we find evidences that Western television had significantly increased wage inequality among males while it has significantly affected female labour participation and led the less productive females to drop out from the market, hiding thus a large increase in wage inequality among females.

We propose a new measure of systemic risk based on interconnectedness, defined as the level of direct and indirect links between financial institutions in a correlation-based network. Deriving interconnectedness in terms of risk, we empirically show that within a financial network, indirect links are strengthened during systemic events. The relevance of our measure is illustrated at both local and global levels. Our framework offers policymakers a useful toolbox for exploring the real-time topology of the complex structure of dependencies in financial systems and for measuring the consequences of regulatory decisions.

The non-take-up of social assistance has been receiving increased attention among policy makers in recent years as it would apparently underpin the effectiveness of public intervention in alleviating poverty. We examine whether receipt of private transfers affects the household decision to take-up social assistance in Germany between 2009 and 2011. We exploit the follow-up of households in the SOEP to reconstruct family links and estimate a model of welfare participation with endogenous private transfers and sample selection of the instruments. We find that 20% of the non-take-up rate is due to monetary substitution of private transfers lowering the welfare program costs. However, we find that social assistance is more effective in alleviating poverty and its intensity than private transfers.

Family history is usually seen as a significant factor insurance companies look at when applying for a life insurance policy. Where it is used, family history of cardiovascular diseases, death by cancer, or family history of high blood pressure and diabetes could result in higher premiums or no coverage at all. In this article, we use massive (historical) data to study dependencies between life length within families. If joint life contracts (between a husband and a wife) have been long studied in actuarial literature, little is known about child and parents dependencies. We illustrate those dependencies using 19th century family trees in France, and quantify implications in annuities computations. For parents and children, we observe a modest but significant positive association between life lengths. It yields different estimates for remaining life expectancy, present values of annuities, or whole life insurance guarantee, given information about the parents (such as the number of parents alive). A similar but weaker pattern is observed when using information on grandparents.

Our analysis of US state-level data on an annual frequency, from 1976 to 2008, sheds new light on a plausible causal link between infrastructure investments, namely public spending on highways, and income inequality. This causal relationship is drawn out by using the number of seats in the US House of Representatives Committee on Appropriations (HRCA) as an instrument to identify quasi-random variations in state-level spending on highways. An exogenous pattern which emerges when a state gains an additional member to the HRCA is that it is allocated with new federal grants. This increase in federal transfers for infrastructure financing results in slashing of expenditures on highways and a crowding-out e˙ect of federal funding for state investments on highways. Spending cuts on highways produced by a new HRCA member being attained by a state can unwittingly cause income inequality to rise over a short two-year time horizon. Similar challenges with decentralized development to finance infrastructure via federal transfers to state and sub-national governments may be encountered by other industrially advanced, emerging and low-income developing economies. US data over the mentioned period reveal a strong positive correlation with state spending on highways and wages paid for construction jobs. Suggestive evidence indicates that the construction sector also plays an important role in the transmission channel from a rise in state spending on highways to lowering income inequality, albeit during specific intervals, as opposed to on a long-term basis.

The occurrence of some revolutionary episodes seems initially puzzling. For example, before the 'Arab Spring', macroeconomic conditions were improving, the political leaders had been in power for a long time, and the autocrats had shown an apparent interest in the welfare of their population by investing in human capital. We argue that such a paradox can be solved by considering that high education levels are incompatible with the features characterising strong neopatrimonial states. We develop this intuition in a simple theoretical model and we test our prediction in a sequential empirical study of regime changes and regime breakdowns in a large panel of countries. We indeed find that a regime change is more likely in countries combining high neopatrimonialism and high education levels. Moreover, when a regime change happens under these circumstances, a revolution is the most likely type of regime breakdown. These results help to understand the 'Arab Spring' but are not specific to the Arab world.

We consider agents organized in an undirected network of local complementarities. A principal with a limited budget offers costly bilateral contracts in order to increase the sum of agents' effort. We study excess-effort linear payment schemes, i.e. contracts rewarding effort in excess to the effort made in absence of principal. The analysis provides the following main insights. First, for all contracting costs, the optimal unit returns offered to every targeted agent are positive and generically heterogeneous. This heterogeneity is due to the presence of outsiders, who create asymmetric interaction between contracting agents. Second, when contracting costs are low, it is optimal to contract with everyone and optimal unit returns are identical for all agents. Third, when contracting costs are sufficiently high, it becomes optimal to target a subset of agents, and optimal targeting can lead to NP-hard problems. In particular, when the intensity of complementarities is sufficiently low, a correspondence is established between optimal targeting and the densest k subgraph problem. Overall, the optimal targeting problem involves a trade-off between centrality and budget spending-central agents are influential, but are also more budget-consuming. These considerations can lead the principal to not target central agents.

In this paper, we reexamine the predictive power of the yield spread across countries and over time. Using a dynamic panel/dichotomous model framework and a unique dataset covering 13 OECD countries over a period of 45 years, we empirically show that the yield spread signals recessions. This result is robust to different econometric specifications, controlling for recession risk factors and time sampling. Using a new cluster analysis methodology, we present empirical evidence of a partial homogeneity of the predictive power of the yield spread. Our results provide a valuable framework for monitoring economic cycles.

Tests are crucial to know about the number of people who have fallen ill with COVID-19 and to understand in real-time whether the dynamics of the pandemic is accelerating or decelerating. But tests are a scarce resource in many countries. The key but still open question is thus how to allocate tests across sub-national levels. We provide a data-driven and operational criterion to allocate tests efficiently across regions or provinces, with the view to maximize detection of people who have been infected. We apply our criterion to Italian regions and compute the shares of tests that should go to each region, which are shown to differ significantly from the actual distribution.

The radical uncertainty around the current COVID19 pandemics requires that governments around the world should be able to track in real time not only how the virus spreads but, most importantly, what policies are effective in keeping the spread of the disease under check. To improve the quality of health decision-making, we argue that it is necessary to monitor and compare acceleration/deceleration of confirmed cases over health policy responses, across countries. To do so, we provide a simple mathematical tool to estimate the convexity/concavity of trends in epidemiological surveillance data. Had it been applied at the onset of the crisis, it would have offered more opportunities to measure the impact of the policies undertaken in different Asian countries, and to allow European and North-American governments to draw quicker lessons from these Asian experiences when making policy decisions. Our tool can be especially useful as the epidemic is currently extending to lower-income African and South American countries, some of which have weaker health systems.

This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries / regions), with assumptions and results both at the world and the country / regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. In particular, Total Factor Productivity (TFP), which is a major source of uncertainty on future growth and hence on CO2 emissions, is endogenously determined, with a rich modeling encompassing energy prices, investment prices, education, structural reforms and decreasing return to the employment rate. We present four scenarios: Business As Usual (BAU), with stable energy prices relative to GDP price; Decrease of Renewable Energy relative Price (DREP), with the relative price of non CO2 emitting electricity decreasing by 2% a year; Low Carbon Tax (LCT) scenario with CO2 emitting energy relative prices increasing by 1% per year; High Carbon Tax (HCT) scenario with CO2 emitting energy relative prices increasing by 3% per year. At the 2100 horizon, global GDP incurs a loss of 12% in the BAU, 10% in the DREP, 8% in the Low Carbon Tax scenario and 7% in the High Carbon Tax scenario. This scenario exercise illustrates both the "tragedy of the horizon", as gains from avoided climate change damage net of damage from mitigating policies are negative in the medium-term and positive in the long-term, and the "tragedy of the commons", as climate change damage is widely dispersed and particularly severe in developing economies, while mitigating policies should be implemented in all countries, especially in advanced countries modestly affected by climate change but with large CO2 emission contributions.

How to allocate limited resources among children is a crucial household decision, especially in developing countries where it might have strong implications for children and family survival. We provide the first systematic study linking variations in parental income in the early life of children to subsequent child health and parental investments across siblings in developing countries, using data from multiple waves of the Demographic and Health Surveys spanning 54 countries. Variations in the world prices of locally produced crops are used as measures of local income. We find that children born in periods of higher income receive better human capital (health and education) investments and durably enjoy better health than their siblings. Children whose siblings were born during favourable income periods receive less investment and exhibit worse health. We also provide evidence that other investments (education, fertility) react to sibling rivalry, and show that these within-households adjustments matter at the aggregate level.

In this paper, we consider a spatiotemporal growth model where a social planner chooses the optimal location of economic activity across space by maximization of a spatiotemporal utilitarian social welfare function. Space and time are continuous, and capital law of motion is a parabolic partial differential diffusion equation. The production function is AK. We generalize previous work by considering a continuum of social welfare functions ranging from Benthamite to Millian functions. Using a dynamic programming method in infinite dimension, we can identify a closed-form solution to the induced HJB equation in infinite dimension and recover the optimal control for the original spatiotemporal optimal control problem. Optimal stationary spatial distributions are also obtained analytically. We prove that the Benthamite case is the unique case for which the optimal stationary detrended consumption spatial distribution is uniform. Interestingly enough, we also find that as the social welfare function gets closer to the Millian case, the optimal spatiotemporal dynamics amplify the typical neoclassical dilution population size effect, even in the long-run.

This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms’ corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.

Why do farm households inefficiently allocate resources across the plots they cultivate? We explore how these production inefficiencies relate to consumption decisions and information sharing within the household. In a lab-in-the-field experiment, male producers allocate too few inputs to their wife's plot, failing to maximize household aggregate profits. They do transfer more inputs when the returns from that plot are higher. Experimental manipulation of information on these returns triggers heterogeneous responses across households. We provide a theoretical framework that rationalizes these findings and further leads to sharp predictions. Joint contribution to a household public good compels spouses to make efficient production decisions. Only households who are in a separate-sphere regime experience inefficiency in farm production and are unable to effectively communicate on returns to avoid extra losses. Consistent with this framework, when we experimentally offer an ex post information verification mechanism, additional losses due to information asymmetries are prevented.

This paper studies a specific class of common-pool resources whereby rivalry is not characterized by competition for the resource stock. Artesian aquifers have been identified as a typical example, since the stock is never depleted, even when part of the resource is extracted. We first propose a dynamic model to account for relevant features of such aquifers-like water pressure, or well yield-and to characterize the corresponding dynamics. We then compare the social optimum and the private exploitation of an open-access aquifer. The comparison of these two equilibria allows us to highlight the existence of a new source of inefficiency. We refer to this as pressure externality. This externality results in the long run in an additional number of wells for the same water consumption, and hence additional costs. Finally, we characterize a specific stock-depend tax to neutralize the pressure externality.

We construct a new, comprehensive instrument-level database of sovereign debt for 18 advanced and emerging countries during 1913–46, an eventful period characterized by notoriously high debt levels. This database is thus the first to provide public debt time series with such a high degree of comparability across countries and time. Documentation of qualitative instrument characteristics offers unique insights about the debt management policies that were implemented and the broader policies they helped finance. We document how interwar governments rolled over debts that were largely unsustainable and how the external public debt network contributed to the collapse of the international financial system in the early 1930s.

Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? We propose a model highlighting the interplay—or lack thereof—between institutional change and cultural beliefs. The main insight is that institutional change by itself will not lead to a more efficient economy unless culture evolves in tandem. This is because institutional change can be countered by changes in cultural values complementary to a more "traditional" economy. In our model, forward-looking elites, who benefit from a traditional, inefficient economy, may over-provide public goods that are complementary to the production of traditional goods. This encourages individuals to transmit cultural beliefs complementary to the provision of traditional goods. A horse race results between institutions, which evolve towards a more efficient (less traditional) economy, and cultural norms, which are pulled towards "tradition" by the elites. When culture wins the horse race, institutions respond by giving more political power to traditional elites—even if in doing so more efficient institutions are left behind. We call the interaction between these cultural and institutional dynamics a cultural revival.

This paper investigates the sustainability of public finances in the European countries since 2002. We provide evidence of heterogenous behaviors among the EU countries and show that, even if they had been forced to focus their fiscal efforts on correcting the deviations of debt from their ceiling -through a correcting mechanism such as the recent TSCG rule-, this would not necessarily have changed the likelihood that debt and deficits become more sustainable. Sources of deviations from stable debt and deficits are related to the macroeconomic environment: the interest-growth differential, momentum dynamics in the sovereign bond markets, how markets react to rising debt.

We develop a theory of institutional transition from dictatorship to minority dominant-based regimes. We depart from the standard political transition framework à la Acemoglu-Robinson in four essential ways: (i) population is heterogeneous, there is a minority/majority split, heterogeneity being generic, simply reflecting subgroup size; (ii) there is no median voter in the post-dictatorship period, political and economic competition is favorable to the minority (fiscal particularism); (iii) (windfall) resources are introduced, and (iv) we distinguish between labor income and resources, and labor supply is endogenous. We first document empirically fiscal particularism, its connection with resource endowment, and the impact of both on revolutionary bursts. Second, we construct a full-fledged model incorporating the four characteristics outlined above. We show, among others, that polarization is a sufficient condition for revolutions, while resource rents are not: they do matter though when polarization is low. In agreement with our empirical facts, countries engaging in revolutions tend to be slightly less resource-rich than other countries. We also outline the interplay between resource rents, polarization and labor market conditions at the dawn of institutional change. Our theory is appropriate to understand the institutional dynamics in highly homogeneous resource-rich countries, which after post-independence autocratic regimes, turn to be dominated by minorities, Algeria being the paradigmatic case.

 This article analyzes the impacts of debt relief on production and pollution. We develop at wo-country overlapping generations model with environmental externalities, public debts and perfect mobility of assets. Pollutant emissions arise from production, but agents may invest in pollution mitigation. Could debt relief be an efficient tool to encourage less developed countries to engage in the fight against climate change? We consider a decrease of the debt of the poor country balanced by an increase of the richer country’s debt. We show that debt relief makes it possible to engage poor countries in the process of pollution abatement. Capital, environmental quality and welfare can increase in both countries. This result relies on the environmental sensitivity and the discount factor in the poor country relative to the rich one: the greater they are the more beneficial the debt relief is.

This paper examines how voluntary contributions to a public good are affected by the contributors' heterogeneity in beliefs about the uncertain impact of their contributions. It assumes that contributors have Savagian preferences that are represented by a two-state-dependent expected utility function and different beliefs about the benefit that will result from the sum of their contributions. We establish general comparative statics results regarding the effect of specific changes in the distribution of beliefs on the (unique) Nash equilibrium provision of the public good, under certain conditions imposed on the preferences. We specifically show that the equilibrium public good provision is increasing with respect to both first and second order stochastic dominance changes in the distribution of beliefs. Hence, increasing the contributors' optimism about the uncertain benefit of their contributions increases aggregate public good provision provision, as does any homogenization of these beliefs around their mean.

Given a profile of preferences on a set of alternatives, a majoritarian relation is a complete binary relation that agrees with the strict preference of a strict majority of these preferences whenever such strict strict majority is observed. We show that a majoritarian relation is, among all conceivable binary relations, the most representative of the profile of preferences from which it emanates. We define "the most representative" to mean "the closest in the aggregate". This requires a definition of what it means for a pair of preferences to be closer to each other then another. We assume that this definition takes the form of a distance function defined over the set of all conceivable preferences. We identify a necessary and sufficient condition for such a distance to be minimized by a majoritarian relation. This condition requires the distance to be additive with respect to a plausible notion of compromise between preferences. The well-known Kemeny distance between preferences does satisfy this property. We also provide a characterization of the class of distances satisfying this property as numerical representations of a primitive qualitative proximity relation between preferences.

This paper analyzes the impact of fiscal spending shocks in a multi-country model with international production networks. In contrast to standard results suggesting that production network linkages are unimportant for the aggregate response to macro shocks in a closed economy, we show that network structures may place a central role in the international propagation of fiscal shocks, particularly when wages are slow to adjust. The paper first develops a simple general equilibrium multi-country model and derives some analytical results on the response to fiscal spending shocks. We then apply the model to an analysis of fiscal spillovers in the Eurozone, using the calibrated sectoral network structure from the World Input Output Database (WIOD). In a version of the model with sticky wages, we find that fiscal spillovers from Germany and some other large Eurozone countries may be large, and within the range of empirical estimates. More importantly, we find that the Eurozone production network is very important for the international spillovers. In the absence of international production network linkages, spillovers would be only a third as large as predicted by the baseline model. Finally, we explore the diffusion of identified German government spending at the sectoral level, both within and across countries. We find that government expenditures have both significant upstream and downstream effects when these links are measured by the direction of sectoral production linkages.

Agricultural policies in poor rural developing countries typically aim at improving household nutrition by raising households’ agricultural profit and presumably their dietary intake as a consequence. However, it is not clear how much of the impact of these policies goes through profit in practice. If the proportion is large, this would confirm the policy orientation and direct the attention of policy makers toward the different financial incentives. Even full activity substitution may occur, which may transform households’ lifestyles and access to nutrient sources and thereby affect their nutrition. If, in contrast, the policy impact does not go through profit, then the policy perspective should be adjusted, and a thorough examination and monitoring of its other channels of influence should be undertaken.
Using statistical mediation analysis, we investigate the mechanisms underlying the effect of agricultural policies directed toward pastoralist households on their dietary intake in terms of these direct and indirect (through profit) effects. Based on an agro-pastoral survey conducted in Niger in 2016, the effects of extension services associated with better access to markets are found to be channeled mostly through pastoral profits, while this is not the case for private veterinary services and low-cost livestock feed programs. Extension services may foster specialization in cattle and sheep raising, which incentivizes households to switch toward a nomadic lifestyle and limits their access to cereals, a valuable source of calories. As a result, extension services are found to damage their calorie intake.

How much do weather shocks matter? The literature addresses this question in two isolated ways: either by looking at long-term effects through the prism of theoretical models, or by focusing on short-term effects using empirical analysis. We propose a framework to bring together both the short and long-term effects through the lens of an estimated DSGE model with a weather-dependent agricultural sector. The model is estimated using Bayesian methods and quarterly data for New Zealand using the weather as an observable variable. In the short-run, our analysis underlines the key role of weather as a driver of business cycles over the sample period. An adverse weather shock generates a recession, boosts the non-agricultural sector and entails a domestic currency depreciation. Taking a long-term perspective, a welfare analysis reveals that weather shocks are not a free lunch: the welfare cost of weather is currently estimated at 0.19% of permanent consumption. Climate change critically increases the variability of key macroeconomic variables (such as GDP, agricultural output or the real exchange rate) resulting in a higher welfare cost peaking to 0.29% in the worst case scenario.

We investigate whether a higher financial integration with the rest of the world can help the African countries reduce their production inefficiency and/or push up their efficient frontier of production. We use two alternative empirical approaches based, respectively, on a stochastic frontier analysis and quantile regressions. We provide evidence of heterogeneous situations across countries and time. This paper proposes a new approach for defining, at the aggregate level, a link between financial openness and production efficiency. We show that one size does not fit all: international financial integration can increase or decrease African countries' standard of living.

A recent strand of papers use sharp regression discontinuity designs (RDD) based on age discontinuity to study the impacts of minimum income and unemployment insurance benefit extension policies. This design challenges job search theory, which predicts that such RDD estimates are biased. Owing to market frictions, people below the age threshold account for future eligibility to the policy. This progressively affects their search outcomes as they get closer to entitlement. Comparing them to eligible people leads to biased estimates because both groups of workers are actually treated. We provide a nonstationary job search model and quantify the theoretical biases on the datasets used in the literature. Our results suggest that the employment impact of minimum income policies are (significantly) under-estimated, whereas the impacts of benefit extensions on nonemployment duration are (not significantly) over-estimated.

We present a model showing the evolution of an organization of agents who discuss democratically about good practices. This model feeds on a field study we did for a few years in France where we followed Non Profit Organizations, called AMAP (a french short food chain), and observed their construction through time at the regional and national level. Most of the hypothesis we make are here either based on the literature on opinion diffusion or on the results of our field study. By defining dynamics where agents influence each other, make collective decision at the group level, and decide to stay in or leave their respective groups, we analyse the effect of different parameters, like size of organizations, on the stability and representativeness of these organizations. The models proves to be robust and we believe is easy to adapt to other context than AMAP. Moreover the article highlights the tension that exists between stability and representativeness in democratic organizations, along with the negative effect of increasing the number of topics to discuss and the positive effect of having openminded members.

The sovereign debt literature emphasizes the possibility of avoiding a self-fulfilling default crisis if markets anticipate the central bank to act as lender of last resort. This paper investigates the extent to which changes in belief about an intervention of the European Central Bank (ECB) explain the sudden reduction of government bond spreads for the distressed countries in summer 2012. We study Twitter data and extract belief using machine learning techniques. We find evidence of strong increases in the perceived likelihood of ECB intervention and show that those increases explain subsequent decreases in the bond spreads of the distressed countries.

Proxy respondents are widely used in population health surveys to maximize response rates. When surveys target frail elderly, the measurement error is expected to be smaller than selection or participation biases. However, in the literature on elderly needs for care, proxy use is most often considered with a dummy variable in which endogeneity with subjects’ health status is rarely scrutinised in a robust way. Pitfalls of this choice extend beyond methodological issues. Indeed, the mismeasurement of needs for care with daily activities might lead to irrelevant social policies or to private initiatives that try to address those needs. This paper proposes a comprehensive and tractable strategy supported by various robustness checks to cope with the suspected endogeneity of proxy use to the unobserved health status of subjects in reports of needs for care with activities of daily living. Proxy respondents’ subjectivity is found to inflate the needs of the elderly who are replaced or assisted in answering the questionnaire and to deflate the probability of unmet or undermet needs.

Since the seminal paper of Atkinson and Bourguignon (1982), little decisive progress has been achieved in developing empirically efficient stochastic dominance criteria for multidimensional social welfare analysis. By proposing new axioms of 'Social Shock Sharing', this paper provides new intuitive justifications to imposing sign restrictions on partial derivatives of individual von Neumann-Morgenstern utility functions. These new breakthrough findings are exploited to derive necessary and sufficient stochastic dominance criteria for multidimensional social welfare comparisons, up to the sixth order, at least. Equivalent results are derived in terms of multidimensional poverty conditions. Empirically powerful discriminatory criteria are obtained by combining all social shock sharing axioms up to some high order and by deriving a dimension reduction property. An application to Egypt at the beginning of the XXI^st century demonstrates the practical substantial gain in discriminating power of the approach by revealing a unambiguous continual improvement in bivariate income-education social welfare over the studied period.

This paper provides empirical evidence that, after fiscal scandals, individuals substantially revise their views on redistribution. I exploit as a quasi-natural experiment the 2016 Panama Papers scandal which revealed top-income tax evasion behaviour simultaneously worldwide. The empirical investigation relies on two original sources of data: a longitudinal dataset on United Kingdom households and a survey conducted in twenty-two European countries. Using a difference-in-differences strategy, I find an increase in pro-redistribution statements post-scandal ranging between 2% and 3.3%. Responses are heterogeneous on income levels and on political affiliations, with larger responses from right-wing individuals. The change in redistribution preferences is moderately translated into votes: I find an increase in voting intentions for the left and negative for the right-wing parties. Complementary estimations at the European-level indicate that pro-redistribution responses increase with media coverage and shock intensity (i.e., number of individuals involved).

Basic sanitation facilities are still lacking in large parts of the developing world, engendering serious environmental health risks. Interventions commonly deliver in-kind or cash subsidies to promote private toilet ownership. In this paper, we assess an intervention that provides information and behavioral incentives to encourage villagers in rural Mali to build and use basic latrines. Using an experimental research design and carefully measured indicators of use, we find a sizeable impact from this intervention: latrine ownership and use almost doubled in intervention villages, and open defecation was reduced by half. Our results partially attribute these effects to increased knowledge about cheap and locally available sanitation solutions. They are also associated with shifts in the social norm governing sanitation. Taken together, our findings, unlike previous evidence from other contexts, suggest that a progressive approach that starts with ending open defecation and targets whole communities at a time can help meet the new Sustainable Development Goal of ending open defecation.

I develop a model of strategic communication to study information aggregation in an alliance between multiple players. An alliance exhibits four features: i) imperfect private information among players; ii) substitutability in actions; iii) constraints on the action set; and iv) preference heterogeneity (biases). The main result of the paper derives conditions for full information aggregation within the alliance under a public communication protocol. Full information aggregation ensues as long as players' biases are sufficiently cohesive with respect to the constraints on the action set. When players can (costlessly) choose an action set ex ante, I derive the precise conditions on the minimal action set such that there is full information aggregation. Comparative statics uncovers two sources for the differences in the size of the minimal action set between players: bias over outcomes (preference effect) and degree of interdependency (interdependency effect). The results are discussed in the context of burden sharing incentives during military interventions within NATO.

We propose a new correlation measure for functionally correlated variables based on local linear dependence. It is able to detect non-linear, non-monotonic and even implicit relationships. Applying the classical linear correlation in a local framework combined with tools from Principal Components Analysis the statistic is capable of detecting very complex dependences among the data. In a first part we prove that it meets the properties of independence, similarity invariance and dependence and the axiom of continuity. In a second part we run a numerical simulation over a variety of dependences and compare it to other dependence measures in the literature. The results indicate that we outperform existing coefficients. We also show better stability and robustness to noise.

In this paper we investigate on Multivariate GARCH models to assess the co-movements between stock prices of american firms listed on main markets and fundamentals. Co-movements can be seen as correlations. The latter are usually estimated via standard GARCH models such as the Dynamic Conditional Correlation (Engle, 2002) or the Baba-Engle-Kraft-Kroner (Baba et al., 1990). Nevertheless more flexible models such as the Orthogonal GARCH of Alexander (2001) can be used as well. We also introduce a new Semi-parametric Orthogonal GARCH as a natural non-linear extension of the Orthogonal GARCH. A Montecarlo simulation is conducted to evaluate finite sample performance of each model before applying them to the data. Empirical results show evidence that during crises, prices are less correlated with fundamentals that in normal periods.

The article conducts a comparative study between Ricœur’s and Rawls’ thought on justice. Whereas Ricoeur focuses on the dialectic between the just and the good, Rawls is concerned with the ideal conditions under which a universal consensus on the principles of justice may be reached. Ricœur gives much importance to reading Rawls. He offers many commentaries, especially on Rawls’s major contribution, A Theory of Justice. This chapter focuses on such comments and on the relating paradoxical interpretation of Rawls’s approach to justice Ricœur provides. First, this chapter suggests that, with his interpretation of Rawls’s major contribution, Ricœur contributes to put the light on the conflicts between the just and the good. These conflicts are the key elements of what may be referred to as the aporia of the just, which consists in the contradictory requirements coming from the just considered as a virtue of either institutions or individuals. Second, this chapter shows that whereas the aporia is a major problem in Rawls’ approach to justice, it is at the core of the dialectic dynamic Ricœur sees within moral life. In his work, the aporia leads to what we call the three paradoxes of justice, which are the paradoxes with legal, distributive and political justice. Considering such paradoxes, Ricœur takes the ethics of practical wisdom as a necessary recourse. The latter provides fair decision makers with the resources needed for the aporia to be, if not resolved, at least eased.

We develop a model of cross-border acquisitions in which the foreign acquirer's ownership choice reflects a trade-off between easing the target's credit constraints and the costs of operating in an environment with weak institutions. Data on domestic and foreign acquisitions in emerging markets over the period 1990-2007 support the model predictions. The share of full foreign acquisitions is higher in sectors more reliant on external finance, in countries with lower financial development, and in countries with higher institutional quality. Sectoral external finance dependence accentuates the effect of country-level financial development and institutional quality. By contrast, the level of foreign ownership in partial acquisitions is insensitive to institutional factors and depends weakly on financial factors.

This paper proposes a new model with time-varying slope coefficients. Our model, called CHAR, is a Cholesky-GARCH model, based on the Cholesky decomposition of the conditional variance matrix introduced by Pourahmadi (1999) in the context of longitudinal data. We derive stationarity and invertibility conditions and prove consistency and asymptotic normality of the Full and equation-by-equation QML estimators of this model. We then show that this class of models is useful to estimate conditional betas and compare it to the approach proposed by Engle (2016). Finally, we use real data in a portfolio and risk management exercise. We find that the CHAR model outperforms a model with constant betas as well as the dynamic conditional beta model of Engle (2016).

Logarithms of prices of financial assets are conventionally assumed to follow drift-diffusion processes. While the drift term is typically ignored in the infill asymptotic theory and applications, the presence of nonzero drifts is an undeniable fact. The finite sample theory and extensive simulations provided in this paper reveal that the drift component has a nonnegligible impact on the estimation accuracy of volatility and leads to a dramatic power loss of a class of jump identification procedures. We propose an alternative construction of volatility estimators and jump tests and observe significant improvement of both in the presence of nonnegligible drift. As an illustration, we apply the new volatility estimators and jump tests, along with their original versions, to 21 years of 5-minute log-returns of the NASDAQ stock price index.

This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly-used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries abundance seems to be a blessing but dependence restricts growth.

We study the gains from trade in a new model with oligopolistic competition, firm heterogeneity, and innovation. Lowering trade costs reduces markups on domestic sales but increases markups on export sales, as firms do not pass the entire reduction in trade costs onto foreign consumers. Trade liberalisation can also reduce the number of firms competing in each market, thereby increasing markups on both domestic and export sales. For the majority of exporters, however, the pro- competitive effect prevails and their average markups decline. The incomplete pass-though and the reduction in the number of competitors instead dominate for top-exporters – the top 0.1% of firms – which end up increasing their markup. In a quantitative exercise we find that the aggregate effect of trade-induced markup changes is pro-competitive and accounts for the majority of the welfare gains from trade. Trade-induced changes in competition affect survival on domestic and export markets and firms’ decision to innovate. All exporters, and especially the top exporters, increase their market size after liberalisation which, in turn, encourages them to innovate more. Hence, top exporters contribute negatively to welfare gains by increasing their markups but positively by increasing innovation and productivity. Firms’ innovation response accounts for a small but non-negligible share of the welfare gains while the contribution of selection is U-shaped, being negative for small liberalisations and positive otherwise. A more globalised economy is therefore populated by larger, fewer and more innovative firms, each feature representing an important source of the gains from trade.

We first clarify the precise theoretical foundations behind the notion of diffusion centrality. This allows us to address a minor inconsistency in the model description of Banerjee et al. (2013). We then identify unnatural implicit assumptions in the model of political intermediation proposed by Cruz, Labonne & Querubfn (2017). We introduce two extensions of diffusion centrality, targeting centrality and reachability, which we believe better capture features of contexts with targeted requests. We derive general explicit formulas to compute these new measures.

In this paper we examine the investment strategy of sovereign wealth funds (SWFs) of the Gulf Cooperation Council (GCC) countries. GCC SWFs are considered as relatively opaque investors and strongly politicized, raising some concerns for perceived political and security risks. We investigate what are the drivers of majority cross- border equity acquisitions made by these institutional investors over the period 2006-2015. Using both Logit and ordered Logit models, we test if the usual determinants of SWFs investments still stand when we look at influential (> 10%) or majority (> 50%) acquisitions made by GCC SWFs. We find that GCC SWFs do not consider financial characteristics of the targeted firms when they acquire large cross-border stakes but rather the characteristics of the country (countries in the European union and/or countries with a high level of shareholders protection), suggesting that their motives may go beyond pure profit maximization. We also find that transparent funds are more likely to take influential or majority stakes and that they do so predominantly in non-strategic sectors. Overall, our results indicate that even if GCC SWFs do not seek only for financial returns, acquiring majority stakes is not a lever for GCC governments to get strategic interests in the target countries.

Over the period 1994-2012, immigrants’ wage growth in France has outperformed that of natives on average by more than 14 percentage points. This striking wage growth performance occurs despite similar changes in employment shares along the occupational wage ladder. In this paper we investigate the sources of immigrants’ relative wage performance focusing on the role of occupational tasks. We first show that immigrants’ higher wage growth is not driven by more favorable changes in general skills (measured by age, education and residence duration), and then investigate to what extent changes in task-specific returns to skills have contributed to the differential wage dynamics through two different channels: different changes in the valuation of skills (“price effect”) and different occupational sorting (“quantity effect”). We find that the wage growth premium of immigrants is not explained by different changes in returns to skills across occupational tasks but rather by the progressive reallocation of immigrants towards tasks whose returns have increased over time. Immigrants seem to have taken advantage of ongoing labor demand restructuring driven by globalization and technological change. In addition im- migrants’ wages have been relatively more affected by minimum wage increases, due to their higher concentration in this part of the wage distribution.

We propose a model of non-balanced endogenous growth in which the final good, which can be either consumed or used as capital, is produced using two intermediate inputs, one being “knowledge-intensive”. Agents working in the knowledge-intensive sector need to accumulate technological knowledge and thus have to decide how to split their individual unit of time between accumulation of technological knowledge (research) and work. Agents working in the second sector do not need to accumulate knowledge and thus devote all their individual unit of time to work. Individual knowledge therefore becomes a labor-augmenting factor, and knowledge accumulation leads to an unbounded increase in TFP in the knowledge-intensive sector, and thus to endogenous capital deepening. The asymmetry in the growth rates of TFP leads to non-balanced growth. Labor (number of workers) reallocations across sectors occur, leading to a greater increase in output for the knowledge-intensive sector. We show that non-balanced growth is consistent with Kaldor facts, as the asymptotic equilibrium is above all characterized by a constant interest rate and capital share in national income. However, the economy follows a growth path converging to a particular level of wealth that depends on the initial price of capital and knowledge. As a consequence, countries with the same fundamentals but lower initial wealth will be characterized by lower asymptotic wealth. We therefore extend the Lucas [19] finding and prove the existence of non-convergence across countries in a framework with structural change.

In this paper we investigate if government balanced-budget rules together with endogenous taxation may lead to aggregate instability in an endogenous growth framework. After highlighting the differences with the exogenous growth framework, we prove that under counter-cyclical consumption taxes, while there exists a unique balanced growth path, sunspot equilibria based on self-fulfilling expectations occur through a form of global indeterminacy. In addition, we argue that this result is empirically plausible for a large set of OECD countries and that it may also emerge with endogenous income taxes.

We investigate the extent to which standard one sector RBC models with positive externalities and variable capacity utilization can account for the large hump- shaped response of output when the model is submitted to a pure sunspot shock. We refine the Benhabib and Wen (2004) model considering a general type of additive separable preferences and a general production function. We provide a detailed theoretical analysis of local stabilities and local bifurcations as a function of various structural parameters. We show that, when labor is infinitely elastic, local indeterminacy occurs through Flip and Hopf bifurcations for a large set of values for the elasticity of intertemporal substitution in consumption, the degree of increasing returns to scale and the elasticity of capital- labor substitution. Finally, we provide a detailed quantitative assessment of the model and conclude with mixed results. We show that although the model is able theoretically to generate a hump-shaped dynamics of output following an i.i.d. sunspot shock under realistic parameter values, the hump is too persistent for the model to be considered fully satisfactory from an empirical point of view.

This is an introduction to the special section on financial frictions and debt constraints.

We study physicians’ incentives to use personalized medicine techniques, replicating the physician’s trade-offs under the option of personalized medicine information. In a laboratory experiment where prospective physicians play a dual-agent real-effort game, we vary both the information structure (free access versus paid access to personalized medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)) by applying a within-subject design. Our results are threefold. i) Compared to FFS and CAP, the P4P payment scheme strongly impacts the decision to adopt personalized medicine. ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalized medicine into higher quality patient care. iii) When it has to be paid for, personalized medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We conclude that this last result can be considered a “commitment device”. However, quantification of our results suggests that the positive impact of the commitment device observed is not strong enough to justify generalizing paid access to personalized medicine.

In this paper, we are interested in the interplay between real estate bubble, aggregate capital accumulation and taxation in an overlapping generations economy with altruistic households. We consider a three-period overlapping generations model with three key elements: altruism, portfolio choice, and financial market imperfections. Households realise different investment decisions in terms of asset at different periods of life, face a binding borrowing constraint and leave bequests to their children. We show that altruism plays a key role on the existence of a productive real estate bubble, i.e. a bubble in real estate raising physical capital stock and aggregate output. The key mechanism relies on the fact that a real estate bubble raises income of retired households. Because of higher bequests, there children are able to invest more in productive capital. Introducing fiscal policy, we show that raising real estate taxation dampens capital accumulation.

We study the implications of structural models of non-equilibrium thinking, in which players best respond while holding heterogeneous beliefs on the cognitive levels of others. We introduce an inclusive cognitive hierarchy model, in which players are capable of projecting the self to others in regard to their cognitive level. The model is tested in a laboratory experiment of collective decision-making, which supports inclusiveness. Our theoretical results show that inclusiveness is a key factor for asymptotic properties of deviations from equilibrium behavior. Asymptotic behavior can be categorized into three distinct types: naïve, Savage rational with inconsistent beliefs, and sophisticated.

Ethnicity often occupies a core role in integrated social, economic, and political development processes, which have mostly been studied within specific countries. Across countries, social and economic development may be supported by political capabilities achieved by ethnic kin abroad, although there is little hard evidence on politico-economic interactions through ethnic networks. We fill this gap by providing the first robust empirical evidence of the substantial effects of political predominance of transborder ethnic kin on local economic development in Africa. This is achieved by specifying and estimating dynamic spatial models of geolocalised luminosity and matching these data with other geolocalised information on geographic, political, and ethnic characteristics. Spatial and ethnic network effects are separately identified and jointly analysed. Not only distinct spatial effects and transborder ethnic effects are exhibited, but also are their complex dynamics and spatial distribution features in terms of local development. The results draw attention to the relevance of a broader international perspective on policies affecting ethnic politics within countries.

This paper analyses the effect of a pay-as-you-go pension system on the evolution of capital and pollution, and on the efficiency of an environmental versus health policy. In an overlapping generations model (OLG), we introduce endogenous longevity that depends on pollution and health expenditures. Global dynamics may display multiple balanced growth paths (BGP). We show that by discouraging savings, a policy that promotes the pension system enlarges the environmental poverty trap. More surprisingly, the environmental policy has contrasted effects according to the significance of the pension system. If it has a low size, a raise of the environmental policy enlarges the environmental poverty trap and leads to a rise in capital over pollution at the highest stationary equilibrium. In contrast, in economies where intergenerational solidarity is well developed, capital over pollution decreases at the highest BGP. In such a case, the environmental policy does not necessarily lead to a better longevity and growth.

We solve a linear-quadratic model of a spatio-temporal economy using a polluting one-input technology. Space is continuous and heterogenous: locations differ in productivity, nature self-cleaning technology and environmental awareness. The unique link between locations is transboundary pollution which is modelled as a PDE diffusion equation. The spatio-temporal functional is quadratic in local consumption and linear in pollution. Using a dynamic programming method adapted to our infinite dimensional setting, we solve the associated optimal control problem in closed-form and identify the asymptotic (optimal) spatial distribution of pollution. We show that optimal emissions will decrease at given location if and only if local productivity is larger than a threshold which depends both on the local pollution absorption capacity and environmental awareness. Furthermore, we numerically explore the relationship between the spatial optimal distributions of production and (asymptotic) pollution in order to uncover possible (geographic) Environmental Kuznets Curve cases.

Although most Microfinance Institutions (MFIs) invest in non-financial services such as business training, empirical evidence on the impact of training on microborrowers’ performance is at best mixed. We address this issue by accounting for business training allocation and its possible effects on borrowers’ behavior. We first show empirically (using data from a French MFI) that the relationship between business training allocation and borrowers’ risk is complex and non- linear. By taking this into account, we establish a positive effect of business training on the survival time of loans. These results are robust to controlling for the MFI’s selection process. We moreover propose a theoretical explanation for the non-linear relationship between borrowers’ risk and training allocation based on reverse asymmetric information, showing that it can lead to increased MFI outreach.

This paper discusses the theoretical choice of exchange rate anchors in Sub-Saharan African countries that are facing external vulnerabilities. To reduce instability, policymakers choose among promoting external competitiveness using a real anchor, lowering the burden of external debt using a nominal anchor or using a policy mix of both anchors. We observe that these countries tend to adopt mixed anchor policies. We solve a state space model to explain the determinants of and the strategy behind this policy. We find that the choice of policy mix is a two-step strategy: First, authorities choose the degree of nominal exchange rate flexibility according to the velocity of money, trade openness, foreign debt, degree of exchange rate pass-through and exchange rate target zone. Second, authorities seek to stabilize the real exchange rate depending on the degree of trade integration with the rest of world and the degree of foreign exchange interventions. We conclude with regime-switching estimations to provide empirical evidence of how these economic fundamentals influence exchange rate policy in Sub-Saharan Africa.

Dans cet article, nous nous intéressons à la coévolution des inégalités sociales, des dispositifs de solidarité et du système économique à travers trois grandes phases durant lesquelles les dispositifs de solidarité ont combiné de manière différenciée deux grandes formes de solidarité, par les proximités (par en bas) vs par l’attribution de droits (par en haut). Avec la globalisation de l'économie et la crise des années 2008 et suivantes, les inégalités sociales se sont accentuées et ont revêtu un aspect spatial marqué, jusqu’à une échelle micro-locale. En nous appuyant sur une approche théorique en termes de proximité et en nous référant aux situations largement évoquées aujourd’hui dans la littérature, nous analysons l’incapacité des politiques publiques à répondre efficacement à cette accentuation par la seule prise en compte de la proximité géographique. De nouvelles solidarités « par le bas » tendent en revanche à apporter des réponses hors de la dualité Etat-marché; elles s’apparentent à de nouvelles formes de communs que nous désignons comme « communs sociaux ». Nous montrons en quoi ces communs se distinguent des modalités anciennes de solidarité communautaire. Nous soulignons enfin à quelles conditions ces communs sont susceptibles de constituer des réponses justes et durables à l’accentuation actuelle des inégalités sociales.

Under uncertainty, mean growth of, say, wealth is often defined as the growth rate of average wealth, but it can alternatively be defined as the average growth rate of wealth. We argue that stochastic stability points to the latter notion of mean growth as the theoretically relevant one. Our discussion is cast within the class of continuous-time AK-type models subject to geometric Brownian motions. First, stability concepts related to stochastic linear homogenous differential equations are introduced and applied to the canonical AK model. It is readily shown that exponential balanced-growth paths are not robust to uncertainty. In a second application, we evaluate the quantitative implications of adopting the stochastic-stability-related concept of mean growth for the comparative statics of global diversification in the seminal model due to Obstfeld (1994).

We study the optimal delegation problem which arises between the median voter (writer of the constitution) and the (future) incumbent politician when not only the state of the world and but also the politician’s type (preferred policy) are the policy-maker’s private information. We show that it is optimal to tie the hands of the politician by imposing him/her both a policy floor and a policy cap and delegating him/her the policy choice only in between. The delegation interval is shown to be the smaller the greater is the uncertainty about the politician’s type. These results apply outside the specific problem to which our model is applied here.

Through utilizing US state-level data at annual frequency from 1976 to 2008, this paper documents a causal effect of infrastructure investments, specifically public spending on highways, on income inequality. The number of seats in the US House of Representatives Committee On Appropriations serves as a valid instrument to identify quasi-random variations in state-level spending on highways. When a given state gains an additional committee member, which is rather exogenous, new federal grants are allocated to that state, resulting in the state government slashing its investment expenditures on highways. In other words, a crowding-out effect of federal funding for state investment in highways is at play. The main contribution of this paper is to show that such committee-driven cuts in spending on highways cause an increase in income inequality within a two-year horizon. In addition, we show that wages paid for construction jobs correlate positively and strongly with spending on highways at the state level. This further provides suggestive evidence that the construction sector plays an important role in the transmission channel from a rise in state spending on highways to a reduction in income inequality.

I study the measurement of the influence of scientists based on bibliographic data. I propose a new measure that accounts for indirect influence and allows to compare scientists across different fields of science. By contrast, common measures of influence that “count citations”, such as the h-index, are unable to satisfy either of these two properties. I use the axiomatic method in two opposite ways: to highlight the two limitations of citation- counting schemes and their independence, and to carefully justify the assumptions made in the construction of the proposed measure.

This paper explores the main differences between the Shapley Values of a set of taxa introduced by Haake et al. [4] and Fuchs and Jin [3], the latter having been found identical to the Fair Proportion Index (Redding and Mooers [10]). In line with Shapley [13], we identify the cooperative game basis for each of these two classes of phylogenetic games and use them (i) to construct simple formulas for these two Shapley values and (ii) to compare these different approaches. Using the set of weights of a phylogenetic tree as a parameter space, we then discuss the conditions under which these two values coincide and, if they are not the same, revisit Hartman's [5] convergence result. Finally, we compare the species ranking induced by these two values. Considering the Kendal and the Spearman rank correlation coefficient, simulations show that these rankings are strongly correlated.

We revisit fertility analysis in Tunisia by focusing on a sequence of fertility regulation instruments, analogous to Bongaarts’ factor approach, and systematically examining family interference with these decisions. In Muslim societies, in which marriage is the exclusive socially tolerated childbearing context, the postponement of a woman’s marriage may prompt her to regulate her fertility. Regarding the other examined birth control decisions (post-marriage delay in the first use of contraception, past and current contraceptive use, choice of birth control method), the husband and the wife’s families may interfere with this decision. These successive decisions may correspond to consecutive phases in a woman’s lifecycle, such as enrolment in higher education, labor market participation, attainment of some fertility objective, and middle- and old-age health problems. In all these phases, the families may play essential roles.Using data from the 2001 PAP-FAM Tunisian survey, we estimate equations that include covariates capturing the above consecutive decisions and provide a coherent picture of the fertility regulation processes in Tunisia, including rarely observed variables on family interactions. Consistent with this setting, we find that the significant effects of covariates arise and vanish across stage-specific equations as women progress in their lifecycle. Our findings show that in Tunisia, family links and sociocultural environments greatly shape fertility regulation decisions. This calls for more intensive involvement of husbands and extended families in family planning policies. This broader perspective suggests that the resurgence of traditionalist politico-religious movements, sometimes associated with youth radicalization, may affect future fertility regulation.

We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent’s effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator’s input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

Credit institutions borrow liquidity from the central bank’s lending facility and deposit (excess) reserves at its deposit facility. The central bank directly controls the corridor: the non-market interest rates of its lending and deposit facilities. Modifying the corridor changes the conditions on the interbank market and allows the central bank to set the short-term interest rate in the economy. This paper assesses the use of the corridor’s width as an additional tool for monetary policy. Results indicate that a symmetric widening of the corridor boosts output and welfare while addressing the central bank’s concerns over higher risk-taking in the economy.

Biological invasions entail massive biodiversity losses and tremendous economic impacts that justify significant management efforts. Because the funds available to control biological invasions are limited, there is a need to identify priority species. This paper first review current invasive species prioritization methods and explicitly highlights their pitfalls. We then construct a cost-benefit optimization framework that incorporates species utility, ecological value, distinctiveness, and species interactions. This framework offers the theoretical foundations of a simple and operational method for the management of invasive species under a limited budget constraint. It takes the form of an algorithm for the prioritization of multiple biological invasions.

This paper revisits the optimal population size problem in a continuous time Ramsey setting with costly child rearing and both intergenerational and intertemporal altruism. The social welfare functions considered range from the Millian to the Benthamite. When population growth is endogenized, the associated optimal control problem involves an endogenous effective discount rate depending on past and current population growth rates, which makes preferences intertemporally dependent. We tackle this problem by using an appropriate maximum principle. Then we study the stationary solutions (balanced growth paths) and show the existence of two admissible solutions except in the Millian case. We prove that only one is optimal. Comparative statics and transitional dynamics are numerically derived in the general case.

We propose a framework for the analysis of choice behavior when the later explicitly depends upon time. We relate this framework to the traditional setting from which time is absent. We illustrate the usefulness of the introduction of time by proposing three possible models of choice behavior in such a framework: (i) changing preferences, (ii) preference formation by trial and error, and (iii) choice with endogenous status-quo bias. We provide a full characterization of each of these three choice models by means of revealed preference-like axioms that could not be formulated in a timeless setting.

This paper highlights the limitations inherent to the stochastic earnings frontier methodology to analyzing wage discrimination and introduces the use of the metafrontier approach as an important improvement. Using US data from the Current Population Survey, we find that white women’s and black men’s maximum attainable hourly earnings represent respectively 80% and 76% of those of white men on average. Furthermore, the metafrontier approach shows that male-female and white-black differences in maximum attainable earnings are observed at all levels of human capital. This innovative methodology permits the identification of a “generalized” glass ceilings against females and blacks in the US.

Growing ecological concerns give rise to salient discussions of green policy impact within different social sciences domains. This research studies the outcomes of voluntary environmental labelling in autarky and upon trade integration in the presence of two types of heterogeneity, across countries and across producers. It investigates the impact of the two main types of eco-labels - multiple-criteria-based programmes (ISO Type I) and self-declared environmental claims (ISO Type II), both of which are simultaneously introduced due to the environmental concerns of consumers. The model illustrates the polarisation of eco-labels when the least productive firms tend to avoid green strategies, lower-middle productive and the most efficient firms are incentivized to greenwash, and the upper-middle productive firms choose trustful programmes. It also shows that voluntary green restrictions lead to substantial productivity effects in the market upon opening to international trade, conditionally, depending on the type of the labelling and the relative degree of environmental awareness across trading countries. The model predicts average market productivity losses and within segments productivity gains for the relatively more eco-concerned country, while the effects for the relatively less eco-concerned country are the opposite.

This paper presents a new efficiency argument for an accommodating taxation policy on high incomes. Job seekers, applying to different segments of a frictional labor market, do not internalize the consequences of mismatch on the entry decision of firms. Workers are not selective enough, resulting in a lower average job productivity and suboptimal job creation. The output-maximizing policy is anti-redistributive to improve the quality of the jobs prospected. As an income tax affects the sharing of the match surplus, a tax on production (or profits) is required to redress the slope of the wage curve. Neither a minimum wage nor unemployment benefits can fully decentralize optimal search behaviors.

While it is established that tourism benefits growth through increased employment and investments, it is not well understood whether tourism has an effect on exports. This paper explores exports as an additional channel through which tourism affects domestic economic activity. Using bilateral tourist and trade flows, I explore the causal effect of tourist flows on exports. To deal with endogeneity, I construct two instruments that I use on two different sets of exporters. The evidence points in the same direction. I find that tourism affects mainly the exports of differentiated products. Specifically, I find that tourism benefits the exports from non-OECD exporters of processed food products and this effect is only estimated for South-North trade with an elasticity close to 1. For European countries, the findings point in the same direction; tourism affects differentiated consumer products and processed food with elasticity close to 1, which adds plausibility to the earlier results. I also find a lagged effect for tourism mainly on the export of consumer goods (for the two samples) and processed food products (for European countries). The results suggest that exports is an additional channel through which tourism can stimulate domestic economic activity in the tourist destination.

Despite the influential work of Cutler and Glaeser [13], whether ghettos are good or bad is still an open and debatable question. In this paper, we provide evidence that, in South Africa, ghettos can be good or bad for income depending on the studied quantile of the income distribution. Segregation tends to be beneficial for rich Whites while it is detrimental for poor Blacks. Even when we find it to be also detrimental for Whites, it is still more detrimental for Blacks. We further show that the multitude of results fuelling this debate can come from misspecification issues and selecting the appropriate sample for the analysis. Finally, we quantify the importance of segregation in the income gap between Blacks and Whites in the post-Apartheid South Africa. We find that segregation can account for up to 40 percent of the income gap at the median. It is even often a larger contribution than education all across the income distribution.

We assess theoretically and empirically the consequences of demand misperceptions. In a New Keynesian model with dispersed information, agents receive noisy signals about both supply and demand. Firms and consumers have an asymmetric access to information, so aggregate misperceptions of demand by the supply side can drive economic fluctuations. The model’s predictions are used to identify empirically fundamental and noise shocks on supply and demand. We exploit survey nowcast errors on both GDP growth and inflation, fundamental and noise shocks affecting the errors with opposite signs. We show that demand-related noise shocks have a negative effect on output and contribute substantially to business cycles. Additionally, monetary policy plays a key role in the transmission of demand noise.

For the first time in Indonesia, we jointly analyse several economic statistics and ethnic diversity indicators at national and local levels. Nationally, we find very high levels of economic inequality, measured from household asset values or consumption expenditure. In contrast, the levels of ethnic diversity, while non-negligible, are much lower, whether they reflect fractionalization, polarization, or horizontal inequity based on individual living standards. All horizontal inequity indicators surged after the Asian economic crisis. Horizontal inequity based on education is much lower and decreasing. Finally, we provide tentative explanations of local horizontal inequity in regressions that show a mixed pattern of socioeconomic influences.

Two duopolists compete in price on the market for a homogeneous product. They can use a 'profiling technology' that allows them to identify the willingness-to-pay of their consumers with some probability. If both firms have profiling technologies of the exact same precision, or if one firm cannot use any profiling technology, then the Bertrand paradox continues to prevail. Yet, if firms have technologies of different precisions, then the price equilibrium exhibits both price discrimination and price dispersion, with positive expected profits. Increasing the precision of both firms’ technologies does not necessarily harm consumers.

As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals, preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.

This paper presents a benchmark endogenous growth model including biodiversity preservation dynamics. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, the safeguarding of a greater number of species is associated to better ecosystem services – pollination, flood control, pest control, etc., which in turn ensure a lower volatility of agricultural productivity. The optimal conversion/preservation rule is explicitly characterized, as well as the value of biological diversity, in terms of the welfare gain of biodiversity conservation. The Epstein-Zin-Weil specification of the utility function allows us to disentangle the effects of risk aversion and aversion to fluctuations. A two-player game extension of the model highlights the effect of volatility externalities and the Paretian sub-optimality of the decentralized choice.

When vacancies are filled, the ads that were posted are generally not withdrawn, creating phantom vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age for otherwise identical listings and so equalize the probability of matching across listing age. Forming a match with a vacancy of age a creates a phantom of age a and thus creates a negative informational externality that affects all vacancies of age a or older. The magnitude of this externality decreases with a. The directed search behavior of job seekers leads them to over-apply to younger listings. We calibrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation.

This paper uses the detailed curricula of French ministers and the detailed accounts of French municipalities to identify governmental investment grants targeted to specific jurisdictions. We distinguish between municipalities in which a politician held office before being appointed as a government’s member and those in which current ministers lived during their childhood. We provide evidence that municipalities in which a minister held office during her career experience a 45% increase in the amount of discretionary investment subsidies they receive during the time the politician they are linked to serves as minister. In contrast, we do not find any evidence that subsidies flow to municipalities from which ministers originate. Additional evidence advocate in favour of a key role of network and knowledge accumulated through connections, illustrated by a persistence of the impact of intergovernmental ties.

What would be the analogue of the Lorenz quasi-ordering when the variable of interest is of a purely ordinal nature? We argue that it is possible to derive such a criterion by substituting for the Pigou-Dalton transfer used in the standard inequality literature what we refer to as a Hammond progressive transfer. According to this criterion, one distribution of utilities is considered to be less unequal than another if it is judged better by both the lexicographic extensions of the maximin and the minimax, henceforth referred to as the leximin and the antileximax, respectively. If one imposes in addition that an increase in someone’s utility makes the society better off, then one is left with the leximin, while the requirement that society welfare increases as the result of a decrease of one person’s utility gives the antileximax criterion. Incidently, the paper provides an alternative and simple characterisation of the leximin principle widely used in the social choice and welfare literature.

This article examines the link between entrepreneurial motivation and business performance in the French microfinance context. Using hand-collected data on business microcredits from a Microfinance Institution (MFI), we provide an indirect measure of entrepreneurial success through loan repayment performance. Controlling for the endogeneity of entrepreneurial motivation in a bivariate probit model, we find that "necessity entrepreneurs" are more likely to have difficulty repaying their microcredits than "opportunity entrepreneurs". However, type of motivation does not appear to make a difference to business survival. We build a stylized model to develop formal arguments supporting this outcome. We test for the robustness of our results using parametric duration models, and show that necessity entrepreneurs experience difficulties in loan repayment earlier than their opportunity counterparts, corroborating our initial findings.

We study absolute qualified majority rules in a setting with more than two alternatives. We show that given two qualified majority rules, if transitivity is desired for the societal outcome and if the thresholds of one of these rules are at least as high as the other's for any pair of alternatives, then at each preference profile the rule with higher thresholds results in a coarser social ranking. Hence all absolute qualified majority rules can be expressed as specific coarsenings of the simple majority rule.

We provide with an optimal growth spatio-temporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. We choose the simplest production function generating growth endogenously, the AK technology but in sharp contrast to the related literature which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology (through the productivity parameter A) and population. Beside the mathematical tour de force, we ultimately show that agglomeration may show up in our optimal growth with linear technology, its exact shape depending on the interaction of two main effects, a population dilution effect versus a technology space discrepancy effect.

The common interpretation given to choice behavior that satisfies the traditional revealed preference axioms is that it results from the maximization of a single preference. We show that choice data alone does not enable one to rule out the possibility that the choice behavior that satisfies the revealed preference axioms is instead the result of the aggregation of a collection of distinct preferences. In particular, we show that any ordering is observationally equivalent to a majoritarian aggregation of a collection of distinct dichotomous orderings. We also show that any ordering is observationally equivalent to a Borda’s aggregation of a collection of distinct linear orderings.

Our paper proposes an original angle to study the free-rider problem in the provision of public goods when the regulator has no information about agents' preferences. For a given outcome - specifically a Lindahl allocation - we ask what assumptions have to be imposed on simple mechanisms (in a precisely defined sense) that have the ability to Nash-implement it. Our answer lies in two main results: i) transfers necessarily belongs to a class of mechanisms that are linear in individual contributions to the public good, ii) there exists a subset of this class that fully implement Lindahl allocations. This subset encompasses, but does not reduce to, Walker (1981).

This paper investigates whether political connections affect individuals’ propensity to engage in illegal activities in financial markets. We use the 2007 French presidential election as marker of change in the value of political connections, in a difference-in-differences research design. We examine the behavior of directors of publicly listed companies who are connected to the future president through campaign donations or direct friendships, relative to that of other non-connected directors, before and after the election. We uncover indirect evidence that connected directors do more illegal insider trading after the election. More precisely, we find that purchases by connected directors trigger larger abnormal returns, and that connected directors are more likely not to comply with trading disclosure requirements and to trade closer to major corporate events.

In this paper, we model the economy as a production network of competitive firms that interact in a general-equilibrium setup. First, we find that, at the unique Walrasian equilibrium, the profit of each active firm is proportional to (a suitable generalization of) its Bonacich centrality. We also determine consumer welfare at equilibrium and characterize efficient networks. Then we proceed to conduct a broad range of comparative-static analyses. These include the effect on profits and welfare of: (a) distortions (e.g. tax/subsidies) imposed on the whole economy or specific firms; (b) structural changes such as the addition of links and the elimination of nodes; (c) productivity and preference changes. We discover that the induced effects are in general nonmonotone, depend on global network features, and impinge on each sector depending on the pattern of incentralities displayed by its input providers and output users. Furthermore, the inter-sector “linkages” underlying these effects can usually be decomposed – following the heuristic dichotomy proposed by Hirschman (1958) – into a forward (push) component and a backward (pull) one. Finally, we undertake some preliminary analysis of firm dynamics and illustrate that, when evaluating policies of support and shock mitigation from a dynamic viewpoint, the reliance on strict market-based criteria can be quite misleading in terms of social welfare.

Les circuits courts semblent à l'heure actuelle dans une phase d’institutionnalisation avérée, en particulier du fait du positionnement croissant des politiques publiques et des mises en réseau multi-scalaires et inter-sectorielles des acteurs. Les observatoires se multiplient : nous étudions celui mis en place par le Conseil Régional PACA. À travers une approche inspirée du cadre d'analyse d'Elinor Ostrom, nous identifions l'impact de cet observatoire sur la capacité des acteurs et participants à faire émerger des règles qui résolvent les dilemmes sociaux liés à la ressource clef du système : la visibilité, à la fois produite et consommée au sein de l'observatoire.

Why, in some urban communities, do rich and poor households cohabit while, in others, we observe sorting by income? To answer this question I develop a two-community general equilibrium framework of school quality, residential choice and tax decision with probabilistic voting. The model predicts that in highly unequal societies in which households segregate by schooling, low- and high-income households choose to live in the same community. When there is less inequality, we observe the typical sorting by income across communities. The theoretical model suggests that the effect of inequality on the quality of public schooling is ambiguous and depends on the relative endowments of housing in the two communities. When inequality increases, if housing in the community where rich and poor households cohabit is affordable, then an inflow of high-income middle class households towards this community emerges. As a consequence, inequality negatively impacts the quality of public schooling due to an ends-against-the-middle coalition that pushes tax rates down.

This paper provides evidence that the external debt-to-fiscal revenue ratio in the emerging countries follows a power-law distribution. Such a distribution reflects the fact that external debt distress or debt crises correspond to extreme events that have been found to happen fairly often. We formally test the hypothesis of a power-law, going further than the usual visual inspection of the distribution of the variable of interest on a doubly logarithmic scale. We further show that such a distribution can be derived from a theoretical model in which uncertainty comes from tax evasion and corruption. Using the framework of an optimal stochastic growth model, we model the external debt-to-fiscal revenue ratio as a diffusion process for which the stochastic steady state distribution is derived using the properties of Itô diffusion processes.

We develop an overlapping generations model of growth, in which agents differ through their ability to procreate. Based on epidemiological evidence, we assume that pollution is a cause of this health heterogeneity, affecting sperm quality. Nevertheless, agents with impaired fertility may incur health treatments in order to increase their chances of parenthood. In this set-up, we analyse the dynamic behaviour of the economy and characterise the situation reached in the long run. Then, we determine the optimal solution that prevails when a social planner maximises a Millian utilitarian criterion and propose a set of available economic instruments to decentralise the optimal solution. We underscore that to correct for both the externalities of pollution and the induced-health inefficiency, it is necessary to tax physical capital while it requires to overall subsidy mostly harmed agents within the economy. Hence, we argue that fighting against the sources of an altered reproductive health is more relevant than directly inciting agents to incur health treatments.

By constructing a novel measure on the frequency of changes in social protection policies, we provide preliminary, yet new evidence on the determinants of social security reforms in Middle East and North Africa (MENA) countries. This fills a gap in literature where analyses of MENA social policies have been lacking due to limited data. Using panel data for seventeen countries from 1961 to 2015, we estimate RE Poisson regression models. Our results indicate that growth in national income and the frequency of social reform in MENA countries are related, first positively for low growth rates, then negatively for high growth rates. This finding is completed by the negative effects of oil production and of the population size on the number of social reforms. Among the avenues of interpretation we examined - investment model, social objectives pursued by the government, and socio-political equilibrium - this is the first one which seems to be better able to fit our results, accompanied by political disturbances.

In the US, black workers spend more time in unemployment, lose their jobs more rapidly, and earn lower wages than white workers. This paper quantifies the contributions of statistical discrimination, as portrayed by negative stereotyping and screening discrimination, to such employment and wage dis- parities. We develop an equilibrium search model of statistical discrimination with learning based on Moscarini (2005) and estimate it by indirect inference. We show that statistical discrimination alone cannot simultaneously explain the observed differences in residual wages and monthly job loss probabilities between black and white workers. However, a model with negative stereotyping, larger unemployment valuation and faster learning about the quality of matches for black workers can account for these facts. One implication of our findings is that black workers have larger returns to tenure.

In this paper, we appraise the recent evolution of the distribution of individuals’ risk of cardiovascular diseases (CVD) in France among both men and women using new normative criteria. An individual risk of CVD is described by a probability of getting such a disease. Building on the framework of Gravel and Tarroux (2015), we assume that individuals, who differ by their income, have Von Neuman-Morgenstern (VNM) preferences over such risks. We appeal to Harsanyi’s aggregation theorem to provide empirically implementable dominance criteria that coincide with the unanimity, taken over a large class of such individual preferences, of anonymous and Pareto-inclusive VNM social rankings of distributions of individuals’ risk of CVD. The implementable criteria that we obtain are Sequential headcount poverty dominance and Sequential headcount affluence dominance. We apply these criteria to the distribution of cardiovascular risks among French men and women on the 2006-2010 period. Probabilities of CVD are assigned to individuals on the basis of a logit model estimated on both the men and the women samples for each of the two years. Our main empirical result is that men and women were differently affected by evolution in the distribution of CVD risks between 2006 and 2010. Specifically, the distribution improved for women but did not improve for men.

We study a productive economy with fractional cash-in-advance constraint on consumption expenditures. Government issues safe bonds and levies taxes to finance public expenditures, while the Central Bank follows a feedback Taylor rules by pegging the nominal interest rate. We show that when the nominal interest rate is bound to be non-negative, under active policy rules a Liquidity Trap steady state does emerge besides the Leeper (1991) equilibrium. The stability of the two steady states depends, in turn, upon the amplitude of the liquidity constraint. When the share of consumption to be paid cash is set lower than one half, the Liquidity Trap equilibrium is indeterminate. The stability of the Leeper equilibrium too depends dramatically upon the amplitude of the liquidity constraint: for low amplitudes of the latter, the Leeper equilibrium, can be indeed stable. Policy and Taylor rules are thus theoretically rehabilitated since their targets, by contrast with a vast literature, may be reached for infinitely many agents’ beliefs. We also show that a relaxation of the liquidity constraint is Pareto-improving and that the Liquidity Trap equilibrium Pareto-dominates the Leeper one, in view of the zero cost of money.

Path-dependence in coordination games may lead to lock-in on inefficient outcomes, such as adoption of inferior technologies (Arthur, 1989) or inefficient economic institutions (North, 1990). We aim to find conditions under which lock-in is overcome by developing a solution concept that makes ex-ante predictions about the adaptation process following lock-in. We assume that some players are myopic, forming beliefs according to fictitious play, while others are sophisticated, anticipating the learning process of the myopic players. We propose a solution concept based on a Nash equilibrium of the strategies chosen by sophisticated players. Our model predicts that no players would switch from the efficient to the inefficient action, but deviations in the other direction are possible. Three types of equilibria may exist: in the first type lock-in is sustained, while in the other two types lock-in is overcome. We determine the existence conditions for each of these equilibria and show that the equilibria in which lock-in is overcome are more likely and the transition is faster when sophisticated players have a longer planning horizon, or when the history of inefficient coordination is shorter.

Because of recent concerns about the negative externalities of traditional fuel use on the environment and health, the issue of the household fuel transition in developing countries, from dirty fuels towards clean fuels, has received growing research attention. This paper provides an up-to-date survey of the economic literature on household fuel use in these countries. First, we present the conceptual and theoretical frameworks. Then, we discuss the empirical results that show how a wide range of factors drive the household fuel transition. Finally, we suggest priorities for policy initiatives and highlight areas of future research.

The Basel Committee on Banking Supervision has introduced in December 2010 a Basel III framework for more resilient banks and banking system. We posit in this paper that, in addition to the current regulatory instruments currently under the review of authorities, the currency diversification of banks’ balance sheets can be a source of banking stability considering both assets and liabilities simultaneously. Our conclusions are based on a simplified definition of a globalized bank’s balance sheet. As banks’ balance sheets are expressed in domestic currency, our model implies an exchange rate conversion of each foreign component. Risks are introduced with stochastic processes in assets, liabilities and exchange rate. In accordance with the Basel III framework and the Basel III Leverage ratio, the bank’s leverage ratio is limited. Our model provides detailed information in each risk faced by global banks including foreign exchange risk. Although our conclusions depend on the variance covariance matrix of assets, liabilities and foreign exchange rate, our main results confirm the positive impact of currency diversification on banking stability considering the current banking system.

We study whether coordination failure is more often overcome if players can easily disclose their actions. In an experiment subjects first choose their action and then choose whether to disclose this action to other group members, and disclosure costs are varied between treatments. We find that no group overcomes coordination failure when action disclosure costs are high, but half of the groups do so when the costs are low. Simulations with a belief learning model can predict which groups will overcome coordination failure, but only if it is assumed that players are either farsighted, risk-seeking or pro-social. To distinguish between these explanations we collected additional data on individual preferences and the degree of farsightedness. We find that in the low cost treatment players classified as more farsighted more often deviate from an inefficient convention and disclose this action, while the effect of risk and social preferences is not significant.

We analyze a version of the Benhabib and Farmer [3] two-sector model with sector-specific externalities in which we consider a class of utility functions inspired from the one considered in Jaimovich and Rebelo [14] which is flexible enough to encompass varying degrees of income effect. First, we show that local indeterminacy and sunspot fluctuations occur in 2-sector models under plausible configurations regarding all structural parameters – in particular regarding the intensity of income effects. Second, we prove that there even exist some configurations for which local indeterminacy arises under any degree of income effect. More precisely, for any given size of income effect, we show that there is a non-empty range of values for the Frisch elasticity of labor and the elasticity of intertemporal substitution in consumption such that indeterminacy occurs. This contrasts with the results obtained in one-sector models in both Nishimura et al. [19], in which it is shown that indeterminacy cannot occur under either GHH and KPR preferences, and in Jaimovich [13] in which local indeterminacy only arises for intermediary income effects.

We document interpersonal violence as a dimension of the resource curse. We rely on a historical natural experiment in the United States, where mineral discoveries occurred sometimes before, sometimes after formal institutions were established in the county of discovery. In places where mineral discoveries occurred before formal institutions were established, there were more homicides per capita historically and the effect has persisted to this day. Today, the share of homicides and assaults explained by the historical circumstances of mineral discoveries is comparable to the effect of education or income. Our results imply that short-term and quasi-exogenous variations in the institutional environment can lead to large and persistent differences in cultural and institutional development.

La région Provence-Alpes-Côte-d'Azur (PACA) a décidé d'initier, suite à des rencontres qui ont débuté en 2010, un observatoire régional des circuits courts. Son but affiché est de coordonner les acteurs et de mutualiser les moyens des différents circuits courts déjà existants dans la région dans la perspective du développement de nouvelles initiatives. Cet article présente une évaluation préliminaire de l'« Observatoire régional des circuits courts » décrit comme un dispositif institutionnel, en considérant son objectif affiché d’initier un processus de gouvernance. L'analyse de la participation à l'observatoire et de ce qui a été produit dans son cadre (références, données, modes d'organisation) a été mené de 2010 à 2014. Cette étude identifie ainsi l’activation d'une proximité organisée et permet de définir l'observatoire comme un dispositif de coordination des acteurs opérationnel. Le processus de gouvernance initié demeure néanmoins fragile.