Documents de travail

2019-28
Age At Parents' Separation And Children Achievement: Evidence From France Using A Sibling Approach
Hélène Le Forner

This paper investigates the link between parental separation and children's achievement in their adulthood. Using a French dataset "Education-Training-Employment", the differences in age of the children at divorce, within a family, are examined in order to control for divorced families selection. The main interest of the paper lies in three particular outcomes : the number of years of schooling, earnings-weighted education, and social position. The results show that individuals whose parents separated have about one semester of schooling less than the children of non-divorced families, they also have lower quality of education and lower social position associated with wages from 4% to 9% lower than individuals who grew up with their two parents. All these estimated effects remain negative and significant within the family. Parental separation is more harmful for boys, or for individuals whose mother is less highly educated.

Mots clés: education, divorce, family economics, family structure, marital dissolution
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2019-27
Particularism, dominant minorities and institutional change
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

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.

Mots clés: political transition, minority/majority, fiscal particularism, dominant minority, resources, labor market
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2019-26
A spatiotemporal framework for the analytical study of optimal growth under transboundary pollution
Raouf Boucekkine
Giorgio Fabbri
Salvatore Federico
Fausto Gozzi

We construct a spatiotemporal frame for the study of optimal growth under transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be space-independent. This provides a comprehensive setting to analyze pollution diffusion with a close account of geographic heterogeneity. The involved optimization problem is infinite-dimensional. We propose an alternative method for an analytical characterization of the optimal paths and the asymptotic spatial distributions. The method builds on a deep economic concept of pollution spatiotemporal welfare effect, which makes it definitely useful for economic analysis.

Mots clés: optimal growth, spatiotemporal modelling, transboundary pollution, infinite dimensional optimal control
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2019-25
Pollution in a globalized world: Are debt transfers among countries a solution?
Marion Davin
Mouez Fodha
Thomas Seegmuller

 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.

Mots clés: pollution; abatement; overlapping generations; public debt; capital market integration
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2019-24
Human Development, Social Interactions, and Identity Formation
Avner Seror

This paper presents a general theory of child development that incorporates interactive learning and identity formation in social interactions with caregivers. The model sheds light on many puzzling aspects of child development. Child learning responds nonmonotonically to caregivers' attention and approval in social interactions. I highlight key parental characteristics associated with child learning, and identity formation. The theory also explains why media devices widen human inequality. Lessons are finally drawn for the design of policies that alleviate human inequality.

Mots clés: human development, human inequality, social interactions, identity, parenting, learning, intergenerational transmission, media
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2019-23
Contribution to a Public Good under Subjective Uncertainty
Anwesha Banerjee
Nicolas Gravel

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.

Mots clés: voluntary provision, public good, uncertainty, beliefs, optimism, consensus
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2019-22
Evaluating Education Systems
Nicolas Gravel
Edward Levavasseur
Patrick Moyes

This paper proposes two dominance criteria for evaluating education systems described as joint distributions of the pupils' cognitive skill achievements and family backgrounds. The first criterion is shown to be the smallest transitive ranking of education systems compatible with three elementary principles. The first principle requires any improvement in the cog-nitive skill of a child with a given family background to be recorded favorably. The second principle demands that any child's cognitive skill be all the more favorably appraised as the child is coming from an unfavorable background. The third principle states that when two different skills and family backgrounds are allocated between two children, it is preferable that the high skill be given to the low background child than the other way around. The criterion considers system A to be better than system B when, for every pair of reference background and skill, the fraction of children with both a lower background and a better skill than the reference is larger in A than in B. Our second criterion completes the first by adding to the three principles the elitist requirement that a mean-preserving spread in the skills of two children with the same background be recorded favorably. We apply our criteria to the ranking of education systems of 43 countries, taking the PISA score in mathematics as the measure of cognitive skills and the largest of the two parents International Socio Economic Index as the indicator of background. We show that, albeit incomplete, our criteria enables conclusive comparisons of about 19% of all the possible pairs of countries. Education systems of fast-growing Asian economies-in particular Vietnam-appear at the top of our rankings while those of relatively wealthy arabic countries such as Lebanon, United Arab Emirates and Jordan are at the bottom. The fraction of countries that can be ranked successfully happens to be only mildly increased as a result of adding elitism to the three other principles.

Mots clés: education, Inequality, family background, opportunities, dominance, math scores, international comparisons
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2019-21
Is the preference of the majority representative?
Mihir Bhattacharya
Nicolas Gravel

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.

Mots clés: preferences, majority, dissimilarity, distance, aggregation
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2019-20
Linear Quantile Regression and Endogeneity Correction
Christophe Muller

The main two methods of endogeneity correction for linear quantile regressions with their advantages and drawbacks are reviewed and compared. Then, we discuss opportunities of alleviating the constant effect restriction of the fitted-value approach by relaxing identification conditions.

Mots clés : two-stage estimation, quantile regression, fitted-value approach, endogeneity
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2019-19
Production Network and International Fiscal Spillovers
Michael B. Devereux
Karine Gente
Changhua Yu

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 other some other large Eurozone countries may be large, and within the range of empirical estimates. More importantly, we find that the Eurozone production network 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.

Mots clés: production network, fiscal policy, spillovers, Eurozone, terms of trade, nominal rigidities
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2019-18
Transitory and Permanent Shocks in the Global Market for Crude Oil
Nooman Rebei
Rashid Sbia

This paper documents the determinants of real oil price in the global market based on SVAR model embedding transitory and permanent shocks on oil demand and supply as well as speculative disturbances. We find evidence of significant differences in the propagation mechanisms of transitory versus permanent shocks, pointing to the importance of disentangling their distinct effects. Permanent supply disruptions turn out to be a bigger factor in historical oil price movements during the most recent decades, while speculative shocks became less influential.

Mots clés: oil market, vector autoregressions, narrative analysis, Bayesian estimation, Kalman filtering
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2019-17
How Do Agro-Pastoral Policies Affect the Dietary Intake of Agro-Pastoralists? Evidence from Niger
Christophe Muller
Nouréini Sayouti

We investigate the mechanisms underlying the effect of agricultural policies directed toward pastoralist households on their dietary intake. To do so, we pursue a mediation analysis while referring to theoretical agricultural household models. We decompose the total effect of selected policies on pastoralist dietary intake into an indirect effect, i.e., the effect that operates through pastoral profits, and a residual direct effect. Using 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 through households’ annual profits from cattle and sheep raising, 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 may incentivize households to move toward a nomadic lifestyle and change their food habits and thereby have detrimental consequences on their calorie intake. Besides, other life choices could be spurred or hampered by policies, such as migrations and radicalization.

Mots clés: agro-pastoral policies, mediation analysis, agricultural household models, Niger
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2019-16
Étude de la démographie française du XIXe siècle à partir de données collaboratives de généalogie
Arthur Charpentier
Ewen Gallic

A l'ère du numérique, les données peuvent être collectées massivement, de manière collaborative et à moindre coût. Les sites de généalogie fleurissent sur Internet pour proposer à leurs utilisateurs de reconstituer en ligne leur arbre généalogique. Le travail de collecte et de saisie effectué par ces utilisateurs peut potentiellement être réutilisé en démographie historique pour compléter la connaissance du passé de nos ancêtres. Dans notre étude, utilisons les enregistrements concernant 2 457 450 individus français ou d'origine française ayant vécu au XIX e siècle. Dans un premier temps, nous étudions la qualité de ces données. Nous mettons en évidence la présence de biais importants, notamment concernant le genre des individus. Les femmes sont sous-représentées dans les données comparativement aux hommes. Des biais relatifs à la fécondité sont également observés. En dépit de ces limites dont souffrent les données collaboratives de généalogie, nous montrons dans un deuxième temps qu'il est possible de retrouver des résultats connus dans la littérature en démographie historique. Plus particulièrement, nous exploitons les dates de naissance et de décès afin d'examiner la mortalité des individus présents dans la base de données. Nous exploitons également la richesse des caractéristiques spatiales contenues dans les arbres généalogiques pour analyser les migrations internes en France.

Mots clés: généalogie, données collaboratives, longévité, migration, XIXe siècle, R
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2019-15
Weather Shocks
Ewen Gallic
Gauthier Vermandel

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.

Mots clés: agriculture, business cycles, climate change, weather shocks
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2019-14
The Effect of Aspirations on Inequality: Evidence from the German Reunification using Bayesian Growth Incidence Curves
Edwin Fourrier-Nicolai
Michel Lubrano

A long-standing literature has investigated the formation of aspirations and how they shape human behaviours but a recent interest has been devoted on the interplay between aspirations and inequality. Because aspirations are socially determined, household investment decisions tend to be reproduced according to the social context which fosters inequality to persist. We empirically examine the role of aspirations on inequality using a natural experiment. We exploit an exogenous variation of social aspirations determined by the exposure to Western German TV broadcasts in the GDR before the reunification. We measure the treatment effect on wage inequality by comparing inequality changes between the treatment and the control regions after reunification. We use an heteroskedastic parametric model for income with a treatment effect and sample selection into the labour market. We derive analytical formulae for the growth incidence curve of Ravallion and Chen (2003) and poverty growth curve of Son (2004) for the log-normal distribution. Based on those curves, we provide Bayesian inference and a set of tests related to stochastic dominance criteria. We find evidences that aspirations-through exposure to Western German broadcasts-have significantly affected inequality. We find that this effect was detrimental in terms of inequality and poverty. However, we cannot conclude about the persistence of the effect after 1995.

Mots clés: Inequality, social aspirations, Bayesian inference, treatment effect
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2019-13
Does International Financial Integration Increase the Standard of Living in Africa? A Frontier Approach
Gilles Dufrénot
Kimiko Sugimoto

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.

Mots clés: African countries, financial openness, stochastic frontier, quantile regression
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2019-12
Potential Growth and Natural Yield Curve in Japan
Gilles Dufrénot
Meryem Rhouzlane
Etienne Vaccaro-Grange

We estimate the yield curve gap in Japan and examine whether it has contributed to the sustained low growth and low inflation rates observed since the beginning 2000s. We use a semi-structural empirical model that generalizes Laubach and Williams’ approach, considering the entire range of maturities of the interest rates and dealing with the issue of mixed frequency sampling. We consider global factors exerting downward pressures on inflation and examine how the neutral yield curve has affected the snowball effect in the dynamics of the Japanese public debt ratio.

Mots clés: yield curve, potential growth, state-space model, Japan
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2019-11
Age Discontinuity and Nonemployment Benefit Policy Evaluation through the Lens of Job Search Theory
Bruno Decreuse
Guillaume Wilemme

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.

Mots clés: RDD, age discontinuity, nonstationary job search theory
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2019-10
French GPs’ Willingness to Delegate Tasks: May Financial Incentives Balance Risk Aversion?
Jean-Baptiste Simon Combes
Alain Paraponaris
Yann Videau

Delegating tasks to paramedics is a fairly recent development in France. So far it has essentially been developed in hospitals and is incipient in general practice. This paper focuses on the willingness of general practitioner to do so. A 2012 survey of 2,000 GPs might help anticipate GPs’ willingness to delegate. This paper tests whether a more favourable funding system might help increase GP willingness. We implement a quasi-experimental design wherein GPs are randomly selected to form three groups of equal size, each of them being exposed to a different funding scheme when declaring their willingness to delegate tasks to nurses: Fully Funded (FF) by the social security administration, self-funded by GPs’ revenues (Self-Funded, SF) and half-funded by both the social security administration and GPs (Half-Funded, HF). GPs’ likelihood to favour task delegation is estimated with a probit model that especially considers a GP’s attitude towards risk (aversion or tolerance) among a set of covariates, such as age, gender, rural/urban area, GP density and funding scheme. This article shows that, first, GPs are more likely to favour delegation, when they share a lower proportion of the cost. Second, the effect of risk aversion on the likelihood of favouring delegation is not altered by the funding scheme.

Mots clés: skill mix, task shifting, risk aversion, financial incentives
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2019-09
Haggling on Values: Towards Consensus or Trouble
Victorien Barbet
Noé Guiraud
Vincent Laperrière
Juliette Rouchier

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.

Mots clés: democracy, organizations, opinion dynamics, agent based modeling
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2019-08
Risky Working Conditions: An Immigrant Trap or an Income Effect?
Eva Moreno-Galbis

Immigrants’ income has been proved to converge to the average native income level with years of residence in the host country. This income assimilation effect is surprisingly not associated with a health improvement. Some emerging studies point towards the role of working conditions as a driver of the counterfactual relation between immigrants’ health and income. Using French data, we first show that, consistently with Viscusi (1978), working conditions are a normal good. An increase in 10% in non-earned income is associated with a decrease by 0.85% in professional injuries and by more than 3.2% in disabilities induced by professional illnesses. Second, we find that while immigrants bear in average worse working conditions than natives, this divergence results from an income divergence effect since for an equivalent non-earned income level there are no significant differences in working conditions between natives and immigrants. Income assimilation of immigrants is associated with an assimilation in working conditions. We conclude then that bad working conditions cannot be blamed for the degradation of immigrants’ health with years of residence in the host country.

Mots clés: immigrants, working conditions, income
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2019-07
“Whatever it Takes” to Change Belief: Evidence from Twitter
Michael Stiefel
Rémi Vivès

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.

Mots clés: self-fulfilling default crisis, unconventional monetary policy, Twitter data
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2019-06
Social Divisiveness and Conflicts: Grievances Matter!
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

Somehow paradoxically, it is common for research on the determinants of civil wars to conclude that social factors matter much less, if at all, than economic factors. We contribute to this debate by conducting an original empirical analysis in which we investigate whether the deliberate unequal treatment of groups of people by a government can give rise to movements opposing the current political system. In doing so, we significantly innovate on the existing literature exploring the links between grievances and civil war. We look at all forms of social conflict, violent and non-violent, high and low intensity. Our index of social divisiveness captures multiple dimensions of observed unequal group treatments and is not restricted to latent ethnic divisions. We control for time-invariant factors in a large sample of countries over a long period of time. We take into account measurement uncertainty, dynamics, cross-region heterogeneity, localised spatial effects, non-linearity of effects, and a potential endogeneity bias. Our results show that social divisiveness has a large, positive, and statistically significant robust effect on anti-system opposition. It also appears to be the main channel through which long-lasting ethnic polarisation influences the onset of civil wars.

Mots clés: civil resistance, civil war, grievances, social conflict, social divisiveness
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2019-05
“If You Were Me”: Proxy Respondents’ Biases in Population Health Surveys
Bérengère Davin
Xavier Joutard
Alain Paraponaris

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.

Mots clés: proxy respondent, measurement bias, endogeneity, selection, Copula, needs for care, ADLs, IADLs
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2019-04
An Operationalizing Theoretical Framework for the Analysis of Universal Health Coverage Reforms: First Test on an Archetype Developing Economy
Sameera Awawda
Mohammad Abu-Zaineh

This paper presents an operationalizing theoretical framework to analyze the potential effects of universal health coverage (UHC) using dynamic stochastic general equilibrium (DSGE) model. The DSGE encapsulates a set of heterogeneous households that optimize their intertemporal utility of consumption, health capital, and leisure. The model is calibrated to capture the salient features of an archetype developing economy. The model is, then, used to simulate alternative UHC-financing policies. The theoretical framework we propose can be easily adapted to assess the implementation of UHC in a particular developing country setting. When applied to a hypothetical country, results show that the implementation of UHC can indeed improve access to healthcare for the population while offering households financial protection against future uncertainty. However, the degree of financial risk protection appears to vary across heterogeneous households and UHC-financing policies, depending on the associated benefits and the additional burden borne by each group.

Mots clés: universal health coverage, financial risk protection, dynamic stochastic general equilibrium model, developing countries
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2019-03
Social Shock Sharing and Stochastic Dominance
Christophe Muller

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 XXIst 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.

Mots clés: multidimensional welfare, stochastic dominance, temperance, risk sharing
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2019-02
Distributed Optimal Control Models in Environmental Economics: A Review
Emmanuelle Augeraud-Véron
Raouf Boucekkine
Vladimir Veliov

We review the most recent advances in distributed optimal control applied to environmental economics, covering in particular problems where the state dynamics are governed by partial differential equations (PDEs). This is a quite fresh application area of distributed optimal control, which has already suggested several new mathematical research lines due to the specificities of the environmental economics problems involved. We enhance the latter through a survey of the variety of themes and associated mathematical structures beared by this literature. We also provide a quick tour of the existing tools in the theory of distributed optimal control that have been applied so far in environmental economics

Mots clés: environmental economics, distributed systems, optimal control, partial differential equations
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2019-01
Top Income Tax Evasion and Redistribution Preferences: Evidence from the Panama Papers
Laila Ait Bihi Ouali

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).

Mots clés: Panama Papers, Tax evasion, tax avoidance, Redistribution, tax morale, Inequality, mass media
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2018-56
Communication and Commitment with Constraints
Raghul S Venkatesh

An informed and an uninformed agent both contribute to a joint coordination game such that their actions are substitutable and constrained. When agents are allowed to share information prior to the coordination stage, in the absence of commitment , there is full information revelation as long as constraints are not binding. The presence of binding constraints results in only partial revelation of information in equilibrium. The most informative equilibrium is strictly pareto dominant. Allowing for limited commitment strictly increases (ex ante) welfare of both agents. I completely characterize the optimal commitment mechanism for the uninformed agent. Finally, I apply the theoretical results to the problem of information sharing and binding agreements in international alliances.

Mots clés : asymmetric information, cheap talk, commitment, strategic substitutes
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2018-55
On Information Aggregation in International Alliances
Raghul S Venkatesh

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.

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2018-54
Accounting for Protest Attitudes in Willingness to Pay for Universal Health Coverage
Mohammad Abu-Zaineh, Olivier Chanel, Khaled Makhloufi

In their attempts to implement universal health coverage (UHC), different developing countries encounter different types of obstacles. In Tunisia, major challenges include a widespread informal sector and protestors’ general discontent with rising economic insecurity and inequality, the rollback of the state and public welfare. We apply a contingent valuation survey to a non-healthcare-covered Tunisian sample vis-à-vis joining and paying for a health insurance scheme. We pay attention to the nature of the willingness- to-pay (WTP) values obtained, distinguishing genuine null from protest values. The latter may reflect not only protesters’ beliefs regarding the survey, but also their lack of trust in government’s commitment to ensuring the provision of quality healthcare. We use alternative econometric modeling strategies to account and correct for selection issues arising from protest answers. Our results support the presence of self- selection and, by predicting protesters’ WTP, allow the “true” sample mean WTP to be computed. This appears to be about 14% higher than the elicited mean WTP. The WTP of the poorest non-covered respondents represents about one and a half times the current contributions of the poorest formal sector enrollees, suggesting that voluntary affiliation to the formal health insurance scheme could be a step towards achieving UHC. Overall, we highlight the importance of taking into account protest positions for the evaluation of progress towards UHC.

Mots clés : willingness-to-pay, contingent valuation, universal health coverage, self-selection, protest attitude
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2018-53
Local Linear Dependence Measure for Functionally Correlated Variables
Loann D. Desboulets, Costin Protopopescu

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.

Mots clés : local correlation, Pearson coefficient, PCA, non-parametric statistic, implicit dependence, non-monotonic, non-linear
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2018-52
A Review on Variable Selection in Regression Analysis
Loann D. Desboulets

In this paper, we investigate on 39 Variable Selection procedures to give an overview of the existing literature for practitioners. "Let the data speak for themselves" has become the motto of many applied researchers since the amount of data has significantly grew. Automatic model selection have been raised by the search for data-driven theories for quite a long time now. However while great extensions have been made on the theoretical side still basic procedures are used in most empirical work, eg. Stepwise Regression. Some reviews are already available in the literature for variable selection, but always focus on a specific topic like linear regression, groups of variables or smoothly varying coefficients. Here we provide a review of main methods and state-of-the art extensions as well as a topology of them over a wide range of model structures (linear, grouped, additive, partially linear and non-parametric). We provide explanations for which methods to use for different model purposes and what are key differences among them. We also review two methods for improving variable selection in the general sense.

Mots clés : variable selection, automatic modelling, sparse models
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2018-51
Co-movements in Market Prices and Fundamentals: A Semiparametric Multivariate GARCH Approach
Loann D. Desboulets

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.

Mots clés : non-parametric, Multivariate GARCH, dynamic correlation, PCA
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2018-50
Federal Minimum Wage Hikes Do Reduce Teenage Employment
Stephen Bazen, Vêlayoudom Marimoutou

In 2002 we published a paper in which we used state space time series methods to analyse the teenage employment-federal minimum wage relationship in the US (Bazen and Marimoutou, 2002). The study used quarterly data for the 46 year period running from 1954 to 1999. We detected a small, negative but statistically significant effect of the federal minimum wage on teenage employment, at a time when some studies were casting doubt on the existence of such an effect. In this note we re-estimate the original model with a further 16 years of data (up to 2015). We find that the model satisfactorily tracks the path of the teenage employment-population ratio over this 60 year period, and yields a consistently negative and statistically significant effect of minimum wages on teenage employment. The conclusion reached is the same as in the original paper, and the elasticity estimates very similar: federal minimum wage hikes lead to a reduction in teenage employment with a short run elasticity of around -0.13. The estimated long run elasticity of between -0.37 and -0.47 is less stable, but is nevertheless negative and statistically significant.

Mots clés : minimum wage, teenage employment, state space methods, unobserved components model
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2018-49
Ricœur, Rawls and the Aporia of the Just
Feriel Kandil

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.

Mots clés : social justice, distributive justice, legal justice, political justice, the just, the good, principles of justice, Kant, Aristotle, Ricœur, Rawls, political paradox, sense of justice
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2018-48
Trade Policy and Market Power: Firm-level Evidence
Alan Asprilla, Nicolas Berman, Olivier Cadot, Melise Jaud

This paper identifies the effect of trade policy on market power through new data and a new identification strategy. We use a large dataset containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product specific information on tariffs and non-tariff barriers. We identify market power by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of our sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, we find that the effect of non-tariff measures is not isomorphic to that of tariffs: the pricing-to-market behavior we observe suggests that, while tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.

Mots clés : trade policy, non-tariff measures, tariffs, exchange rate, price discrimination
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2018-47
Financial Constraints, Institutions, and Foreign Ownership
Ron Alquist, Nicolas Berman, Rahul Mukherjee, Linda L. Tesar

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.

Mots clés : foreign direct investment, foreign ownership, mergers and acquisitions, financial development, institutional quality
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2018-46
Demand Learning and Firm Dynamics: Evidence from Exporters
Nicolas Berman, Vincent Rebeyrol, Vincent Vicard

This paper provides direct evidence that learning about demand is an important driver of firms' dynamics. We present a model of Bayesian learning in which firms are uncertain about their idiosyncratic demand in each of the markets they serve, and update their beliefs as noisy information arrives. Firms are predicted to update more their beliefs to a given demand shock, the younger they are. We test and empirically confirm this prediction, using the structure of the model together with exporter-level data to identify idiosyncratic demand shocks and the firms’ beliefs about future demand. Consistent with the theory, we also find that the learning process is weaker in more uncertain environments.

Mots clés : firm growth, belief updating, demand, exports, uncertainty
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2018-45
Asymptotics of Cholesky GARCH Models and Time-Varying Conditional Betas
Serge Darolles, Christian Francq, Sébastien Laurent

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).

Mots clés : multivariate-GARCH, conditional betas, covariance
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2018-44
Generating Univariate Fractional Integration within a Large VAR(1)
Guillaume Chevillon, Alain Hecq, Sébastien Laurent

This paper shows that a large dimensional vector autoregressive model (VAR) of finite order can generate fractional integration in the marginalized univariate series. We derive high-level assumptions under which the final equation representation of a VAR(1) leads to univariate fractional white noises and verify the validity of these assumptions for two specific models.

Mots clés : long memory, vector autoregressive model, marginalization, final equation representation
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2018-43
Volatility Estimation and Jump Detection for drift-diffusion Processes
Sébastien Laurent, Shuping Shi

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.

Mots clés : diffusion process, nonzero drift, finite sample theory, volatility estimation, jumps
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2018-42
Complementary Monopolies with Asymmetric Information
Didier Laussel, Joana Resende

We investigate how asymmetric information on final demand affects strategic interaction between a downstream monopolist and a set of up-stream monopolists, who independently produce complementary inputs. We study an intrinsic private common agency game in which each supplier i independently proposes a pricing schedule contract to the assembler, specifying the supplier's payment as a function of the assembler's purchase of input i. We provide a necessary and sufficient equilibrium condition. A lot of equilibria satisfy this condition but there is a unique Pareto-undominated Nash equilibrium from the suppliers' point of view. In this equilibrium there are unavoidable efficiency losses due to excessively low sales of the good. However, suppliers may be able to limit these distortions by implicitly coordinating on an equilibrium with a rigid (positive) output in bad demand circumstances.

Mots clés : complementary inputs, asymmetric information, private common agency games
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2018-41
Threshold Regressions for the Resource Curse
Nicolas Clootens, Djamel Kirat

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.

Mots clés : non-renewable resources, growth, resource curse, threshold regressions
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2018-40
Is the Output Growth Rate in NIPA a Welfare Measure?
Jorge Duran, Omar Licandro

Bridging modern macroeconomics and the economic theory of index numbers, this paper shows that real output growth as measured by National Income and Product Accounts (NIPA) is a welfare based measure. In a two-sector dynamic general equilibrium model of heterogeneous households, recursive preferences and quasi-concave technology, individual welfare depends on present and future consumption. In this context, the Bellman equation provides a representation of preferences over current consumption and investment. Applying standard index number theory to this representation of preferences, it is shown that the Fisher-Shell true quantity index is equal to the Divisia index in turn well approximated by the Fisher ideal chain index used in NIPA.

Mots clés : growth measurement, quantity indexes, equivalent variation, NIPA, Fisher-Shell index, Divisia index, embodied technical change
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2018-39
Technology, Market Structure and the Gains from Trade
Giammario Impullitti, Omar Licandro, Pontus Rendahl

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.

Mots clés : gains from trade, heterogeneous firms, oligopoly, innovation, endogenous markups, endogenous market structure
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2018-38
Altruism and Risk Sharing in Networks
Renaud Bourlès, Yann Bramoullé, Eduardo Perez-Richet

We provide the first analysis of the risk-sharing implications of altruism networks. Agents are embedded in a fixed network and care about each other. We study whether altruistic transfers help smooth consumption and how this depends on the shape of the network. We identify two benchmarks where altruism networks generate efficient insurance: for any shock when the network of perfect altruism is strongly connected and for any small shock when the network of transfers is weakly connected. We show that the extent of informal insurance depends on the average path length of the altruism network and that small shocks are partially insured by endogenous risk-sharing communities. We uncover complex structural effects. Under iid incomes, central agents tend to be better insured, the consumption correlation between two agents is positive and tends to decrease with network distance, and a new link can decrease or increase the consumption variance of indirect neighbors. Overall, we show that altruism in networks has a first-order impact on risk and generates specific patterns of consumption smoothing.

Mots clés : altruism, networks, risk sharing, Informal Insurance
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2018-37
Diffusion Centrality: Foundations and Extensions
Yann Bramoullé, Garance Genicot

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.

Mots clés : diffusion centrality, Katz-Bonacich centrality, political intermediation, targeting
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2018-36
The Wall’s Impact in the Occupied West Bank: A Bayesian Approach to Poverty Dynamics Using Repeated Cross-Sections
Tareq Sadeq, Michel Lubrano

In 2002, the Israeli government decided to build a wall inside the occupied West Bank. The wall had a marked effect on the access to land and water resources as well as to the Israeli labour market. It is difficult to include the effect of the wall in an econometric model ex- plaining poverty dynamics as the wall was built in the richer region of the West Bank. So a diff-in-diff strategy is needed. Using a Bayesian approach, we treat our two-period repeated cross-section data set as an incomplete data problem, explaining the income-to-needs ratio as a function of time invariant exogenous variables. This allows us to provide inference results on poverty dynamics. We then build a conditional regression model including a wall variable and state dependence to see how the wall modified the initial results on poverty dynamics. We find that the wall has increased the probability of poverty persistence by 58 percentage points and the probability of poverty entry by 18 percentage points.

Mots clés : Bayesian inference, pseudo panels, data augmentation, walls, poverty dynamics
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2018-35
GCC Sovereign Wealth Funds: Why do they Take Control?
Jeanne Amar, Jean-François Carpantier, Christelle Lecourt

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.

Mots clés : sovereign wealth funds, cross-border majority acquisitions, ordered logit model, GCC
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2018-34
Reforms and the Real Exchange Rate: The Role of Pricing-to-Market
Lise Patureau, Céline Poilly

The paper investigates how endogenous markups affect the extent to which policy reforms can influence international competitiveness. In a two-country model where trade costs allow for international market segmentation, we show that endogenous pricing-to-market behavior of firms acts as an important transmission channel of the policies. By strengthening the degree of competition between firms, product market deregulation at home leads to a reduction in domestic markups, which generally leads to an improvement in the international competitiveness of the Home country. Conversely, the power of competitive tax policy to depreciate the real exchange rate is dampened, as domestic firms take the opportunity of the labor tax cut to increase their markups. The variability of markups also affects the normative implications of the reforms. This indicates the importance of taking into account endogenous pricing-to-market behavior when intending to correctly evaluate the overall effects of the reforms.

Mots clés : exchange rate, product market deregulation, fiscal reform, endogenous firm entry, pricing-to-market, endogenous markups
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2018-33
Immigrants' Wage Performance in a Routine Biased Technological Change Era: France 1994-2012
Catherine Laffineur, Eva Moreno Galbis, Jeremy Tanguy, Ahmed Tritah,

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.

Mots clés : wage dynamics, tasks, immigrants, skills
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2018-32
Network Matching Efficiency along the Economic Cycle: Direct and Indirect Ties
Arnaud Herault, Eva Moreno Galbis, Francois-Charles Wolff

There is a large consensus in the literature on the major role of social networks as a helpful instrument to find a job. In this paper, we study the social network matching rate along the economic cycle both from a theoretical and empirical perspective. Using the French Labor Force Survey for the period 2003-2012, we find that the relationship between the network matching rate based on direct ties and the job finding rate is decreasing and convex as predicted by our theoretical setup. Results are completely modified when we consider a measure of the network matching rate based on indirect ties related to the share of peers in a job. In this case, we find a linearly increasing relation between the network matching rate and the job finding rate. This underlines not only the heterogeneous ways through which network membership may influence the individuals’ performance on the labor market, but also the different behaviors of these driving factors along the economic cycle.

Mots clés : employment, network matching rate, direct and indirect ties, job finding rate, immigrants
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2018-31
Non-Balanced Endogenous Growth and Structural Change: When Romer Meets Kaldor and Kuznets
Christian Ghiglino, Kazuo Nishimura, Alain Venditti

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.

Mots clés : two-sector model, technological knowledge, non-balanced endogenous growth, structural change, Kaldor and Kuznets facts
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2018-30
Competitive Equilibrium Cycles for Small Discounting in Discrete-Time Two-Sector Optimal Growth Models
Alain Venditti

We study the existence of endogenous competitive equilibrium cycles under small discounting in a two-sector discrete-time optimal growth model. We provide precise concavity conditions on the indirect utility function leading to the existence of period-two cycles with a critical value for the discount factor that can be arbitrarily close to one. Contrary to the continuous-time case where the existence of periodic-cycles is obtained if the degree of concavity is close to zero, we show that in a discrete-time setting the driving condition does not require a close to zero degree of concavity but a symmetry of the indirect utility function’s concavity properties with respect to its two arguments.

Mots clés : two-sector optimal growth model, small discounting, period-two cycles, strong and weak concavity
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2018-29
Time-varying Consumption Tax, Productive Government Spending, and Aggregate Instability
Mauro Bambi, Alain Venditti

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.

Mots clés : endogenous growth, time-varying consumption tax, global indeterminacy, self-fulfilling expectations, sunspot equilibria
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2018-28
A Note on Balanced-Budget Income Taxes and Aggregate (In)Stability in Multi-Sector Economies
Nicolas Abad, Alain Venditti

We examine the impact of balanced-budget labor income taxes on the existence of expectation- driven business cycles in a two-sector version of the Schmitt-Grohé and Uribe (SGU) [18] model with constant government expenditures and counter-cyclical taxes. Our results show that the destabilizing impact of labor income taxes strongly depends on the capital intensity difference across sectors. Local indeterminacy is indeed more likely when the consumption good sector is capital intensive, as the minimal tax rate decreases, and less likely when the investment good sector is capital intensive, as the minimal tax rate increases. The implication of this result can be quantitatively significant. Indeed, when compared to SGU, local indeterminacy can be either completely ruled out for all OECD countries when the investment good is sufficiently capital intensive, or drastically improved, delivering indeterminacy for a larger set of OECD countries, if the consumption good is sufficiently capital intensive. Focusing however on recent estimates of the sectoral capital shares corresponding to the empirically plausible case of a capital intensive consumption good, we find that there is a significant increase of the range of economically relevant labor tax rates (from a minimum tax rate of 30% to 24.7%) for which local indeterminacy arises with respect to the aggregate formulation of SGU.

Mots clés : aggregate (in)stability, local indeterminacy, expectations-driven fluctuations, labor income taxes, balanced-budget rule, infinite-horizon two-sector model, capital intensity difference
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2018-27
On Sunspot Fluctuations in Variable Capacity Utilization Models
Frédéric Dufourt, Alain Venditti, Rémi Vives

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.

Mots clés : Indeterminacy, real business cycles, sunspot shock, capacity utilization, externalities
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2018-26
Non-Separable Preferences do not Rule Out Aggregate Instability under Balanced-Budget Rules: A Note
Nicolas Abad, Thomas Seegmuller, Alain Venditti

We investigate the role of non-separable preferences on the occurrence of macroeconomic instability under a balanced-budget rule where government spending is financed by a tax on labor income. Considering a one-sector neoclassical growth model with a large class of non-separable utility functions, we find that expectations-driven fluctuations easily occur when consumption and labor are Edgeworth substitutes or weak Edgeworth complements. Under these properties, an intermediate range of tax rates and a sufficiently low elasticity of intertemporal substitution in consumption lead to instability.

Mots clés : Indeterminacy, expectations-driven business cycles, labor income taxes, balanced-budget rule, non-separable preferences
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2018-25
Introduction to Financial Frictions and Debt Constraints
Raouf Boucekkine, Kazuo Nishimura, Alain Venditti

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

Mots clés : rational bubbles, credit and borrowing constraints, public debt constraints, (in)complete markets, heterogeneous agents, sunspot fluctuations
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2018-24
Introduction to International Financial Markets and Banking Systems Crises
Raouf Boucekkine, Kazuo Nishimura, Alain Venditti

This note introduces to the literature streams explored in the special section on international financial markets and banking systems crises. All topics tackled are related to the Great Recession. A brief overview of the research questions and related literatures is provided.

Mots clés : financial frictions, financial instability, international transmission, credit crunch, banking and sovereign debt crisis
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2018-23
Physicians’ Incentives to Adopt Personalized Medicine: Experimental Evidence
David Bardey, Samuel Kembou Nzale, Bruno Ventelou

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.

Mots clés : personalized medicine, fee-for-service, capitation, pay-for-performance, physician altruism, laboratory experiment
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2018-22
Wage Satisfaction and Wage History: How the Present Shapes the Past
Alberto Prati

Although satisfaction measures strongly depend on personal history, the relationship between memory and current well-being is still unclear. This article is dedicated to empirically investigating if current wage satisfaction affects the ability to date past wage changes. We match answers from a French national survey with administrative records, to compare the recalled and actual wage history. Our data support and extend some previous findings from the psychology literature: relatively remote events are recalled as closer in time, while relatively recent events are recalled as further in time. An instrumental variable strategy shows that these effects – respectively known as “forward” and “backward telescoping” – are partially caused by current satisfaction, so that, ceteris paribus, people who are satisfied with their wage tend to date wage cuts as more remote than they actually are. We suggest that this pattern of imperfect recall, which we denote as hedonic telescoping, opens a new perspective in the understanding of the well-known phenomenon of hedonic adaptation.

Mots clés : recall bias, wage satisfaction, wage history, hedonic adaptation, hedonic telescoping
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2018-21
Bubble on Real Estate: The Role of Altruism and Fiscal Policy
Lise Clain-Chamosset-Yvrard, Thomas Seegmuller

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.

Mots clés : bubble, altruism, real estate, credit, overlapping generations
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2018-20
Managing Competition on a Two-Sided Platform
Paul Belleflamme, Martin Peitz

On many two-sided platforms, users on one side not only care about user participation and usage levels on the other side, but they also care about participation and usage of fellow users on the same side. Most prominent is the degree of seller competition on a platform catering to buyers and sellers. In this paper, we address how seller competition affects platform pricing, product variety, and the number of platforms that carry trade.

Mots clés : network effects, two-sided markets, platform competition, intermediation, pricing, Imperfect Competition
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2018-19
Inclusive Cognitive Hierarchy in Collective Decisions
Yukio Koriyama, Ali Ozkes

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.

Mots clés : collective decision-making, bounded rationality, cognitive hierarchy, information aggregation
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2018-18
Secular Stagnation: New Challenges for the Industrialized Countries in the 21st Century
Gilles Dufrenot, Meryem Rhouzlane

This paper attempts to provide an overview of the main challenges facing industrialized in a context of secular stagnation. There is no consensus on the meaning of this concept and various alternative views coexist. We present the key issues in the debates today, accounting for phenomena like the slowdown in factor productivity, liquidity and safety traps, the decline of natural interest rates, the historical downward trend of potential growths and low inflation rates. We provide a bird’s eye survey of the available literature on the causes of secular stagnation from a historical perspective, the symptoms, the main causes as well as some policies proposed to overcome it. We give some illustrations for the United Kingdom, the United States, the euro area and Japan.

Mots clés : secular stagnation, natural interest rates, history, industrialized countries
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2018-17
Transborder Ethnic Kin and Local Prosperity: Evidence from Night-Time Light Intensity in Africa
Christophe Muller, Pierre Pecher

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.

Mots clés : local development, ethnic networks, institutions
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2018-16
Male Reproductive Health, Fairness and Optimal Policies
Johanna Etner, Natacha Raffin, Thomas Seegmuller

Based on epidemiological evidence, we consider an economy where agents differ through their ability to procreate. Households with impaired fertility may incur health expenditures to increase their chances of parenthood. This health heterogeneity generates welfare inequalities that deserve to be ruled out. We explore three different criteria of social evaluation in the long-run: the utilitarian approach, which considers the well- being of all households, the ex-ante egalitarian criterion, which considers the expected well-being of the worst-off social group, and the ex-post egalitarian one, which only considers the realized well-being of the worst- off. In an overlapping generations model, we propose a set of economic instruments to decentralize each solution. To correct for the externality and inequalities, both a preventive (a taxation of capital) and a redistributive policy are required.

Mots clés : reproductive health, fairness, egalitarianism, optimal policy, OLG model
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2018-15
Pollution and Growth: The Role of Pension on the Efficiency of Health and Environmental Policies
Armel Ngami, Thomas Seegmuller

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.

Mots clés : longevity, environment, Health, pension system, growth, Pollution
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2018-14
International Credit Markets and Global Business Cycles
Patrick A. Pintus, Yi Wen, Xiaochuan Xing

This paper stresses a new channel through which global financial linkages contribute to the co-movement in economic activity across countries. We show in a two-country setting with borrowing constraints that international credit markets are subject to self-fulfilling variations in the world real interest rate. Those expectation-driven changes in the borrowing cost in turn act as global shocks that induce strong cross-country co-movements in both financial and real variables (such as asset prices, GDP, consumption, investment and employment). When firms around the world benefit from unexpectedly low debt repayments, they borrow and invest more, which leads to excessive supply of collateral and of loanable funds at a low interest rate, thus fueling a boom in both home and abroad. As a consequence, business cycles are synchronized internationally. Such a stylized model thus offers one way to rationalize both the existence of a world business-cycle component, documented by recent empirical studies through dynamic factor analysis, and the factor’s intimate link to global financial markets.

Mots clés : world interest rate, international co-movement, self-fulfilling equilibria
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2018-13
Geographic Environmental Kuznets Curves: The Optimal Growth Linear-Quadratic Case
Raouf Boucekkine, Giorgio Fabbri, Salvatore Federico, Fausto Gozzi

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.

Mots clés : growth, geography, transboundary pollution, infinite dimensional optimal control problems
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2018-12
Group Targeting under Networked Synergies
Mohamed Belhaj, Frédéric Deroïan

A principal targets agents organized in a network of local complementarities, in order to increase the sum of agents' effort. We consider bilateral public contracts à la Segal (1999). The paper shows that the synergies between contracting and non-contracting agents deeply impact optimal contracts: they can lead the principal to contract with a subset of the agents, and to refrain from contracting with central agents.

Mots clés : multi-agent contracting, Network, synergies, aggregate effort, optimal group targeting
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2018-11
Business Training and Loan Repayment: Theory and Evidence from Microcredit in France
Renaud Bourlès, Anastasia Cozarenco, Dominique Henriet, Xavier Joutard

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.

Mots clés : microcredit, business training, reverse asymmetric information
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2018-10
Stochastic Petropolitics: The Dynamics of Institutions in Resource-Dependent Economies
Raouf Boucekkine, Fabien Prieur, Chrysovalantis Vasilakis, Benteng Zou

We provide an analysis of institutional dynamics under uncertainty by means of a stochastic differential game of lobbying with two players (conservatives vs liberals) and three main ingredients. The first one is uncertainty inherent in the institutional process itself. The second considers resource windfalls volatility impact on economic and institutional outcomes. Last but not least, the resource windfall level matters in the relative bargaining power of the players. We compute a unique closed-loop equilibrium with linear feedbacks. We show that the legislative state converges to an invariant distribution. Even more importantly, we demonstrate that the most likely asymptotic legislative state is favorable to the liberals. However, the more volatile resource windfalls, the less liberal is the most likely asymptotic state. Finally, we assess the latter prediction on a database covering 91 countries over the period 1973-2005. We focus on financial liberalization policies. We find that as the resources revenues volatility increases, the financial liberalization index goes down. We also find that this property remains robust across different specifications and sample distinctions.

Mots clés : institutional dynamics, petropolitics, lobbying games, revenue-dependent lobbying power, stochastic dynamic games, stochastic stability
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2018-09
Exchange Rate Policy and External Vulnerabilities in Sub-Saharan Africa: Nominal, Real or Mixed Targeting?
Fadia Al Hajj, Gilles Dufrenot, Benjamin Keddad

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.

Mots clés : African countries, exchange rate policy, external vulnerabilities, regime-switching model
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2018-08
Household Fuel Use in Rural China
Christophe Muller, Huijie Yan

The household transition from dirty to clean fuels is important because of its economic, health and environment consequences, locally, nationally and globally. In order to study fuel choices, a non-separated farm household model for fuel demands is developed. Then, discrete choice equations of fuel uses, consistent with this theoretical model, are estimated using microeconomic household panel data from rural China.The estimation results support the theoretical approach that implies that the fuel demands depend not only on income, fuel prices, and demand-side socioeconomic factors, as would occur in the standard fuel demand models in the literature, but also on food prices, agricultural assets, and original household and community characteristics that shape the household responses to market failures. Finally, we present a few policy simulations that reveal the complex substitution impact of energy price policies in China.We provide the first evidence on: price sensitivity of fuel stacking, that food prices exert some pressure on the fuel transition, the role of farm work and activity specialization in fuel choices. Policies should incorporate some of the complexity of the non-separated decisions of rural households in this context of market failures. The complex cross-price effects imply that the policy pricing mechanisms should account for all energy types and food prices. Finally, market-based policies should be coupled with policy interventions aimed at increasing the opportunity cost of dirty fuels.

Mots clés : fuel use, China, consumption demand, energy
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2018-07
Proximités et Solidarités : de l’État-Providence aux Communs Sociaux
Jacques Garnier, Jean-Benoît Zimmermann

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.

Mots clés : France, inégalités, solidarité, proximité, communs territoriaux, communs sociaux
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2018-06
Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations
Paul Belleflamme, Martin Peitz

The rise and success of digital platforms (such as Airbnb, Amazon, Booking, Expedia, Ebay, and Uber) rely, to a large extent, on their ability to address two major issues. First, to effectively facilitate transactions, platforms need to resolve the problem of trust in the implicit or explicit promises made by the counterparties; they post reviews and ratings to pursue this objective. Second, as platforms operate in marketplaces where information is abundant, they may guide their users towards the transactions that these users may have an interest in; recommender systems are meant to play this role. In this article, we elaborate on review, rating, and recommender systems. In particular, we examine how these systems generate network effects on platforms.

Mots clés : platforms, network effects, ratings, recommender systems, digital economics
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2018-05
Mean Growth and Stochastic Stability in Endogenous Growth Models
Raouf Boucekkine, Patrick A. Pintus, Benteng Zou

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).

Mots clés : endogenous stochastic growth, mean growth, stochastic stability, AK model, global diversification
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2018-04
Targeting the Key Player: An Incentive-Based Approach
Mohamed Belhaj, Frédéric Deroïan

We consider a network game with local complementarities. A policymaker, aiming at minimizing or maximizing aggregate effort, contracts with a single agent on the network to trade effort change against transfer. The policymaker has to find the best agent and the optimal contract to offer. Our study shows that for all utilities with linear best-responses, it only takes two statistics about the position of each agent on the network to identify the key player: the Bonacich centrality and a weighted measure of the number of closed walks originating from the agent. We also characterize key players under linear quadratic utilities for various contractual arrangements.

Mots clés : key player, Network, Linear Interaction, incentives, contract, limited budget
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2018-03
Tying the Politicians’ Hands: The Optimal Limits to Representative Democracy
Didier Laussel

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.

Mots clés : representative democracy, optimal delegation, political uncertainty
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2018-02
Optimal Cash Transfers with Distribution Regressions: An Application to Egypt at the Dawn of the XXIst Century
Christophe Muller

Social programmes for poverty alleviation involve eligibility rules and transfer rules that often proxy-means tests. We propose to specify the estimator in connection with the poverty alleviation problem. Three distinct stages emerge from the optimization analysis: the identification of the poor, the ranking of their priorities and the calculus of the optimal transfer amount. These stages are implemented simultaneous by using diverse distribution regression methods to generate fitted-values of living standards plugged into the poverty minimization programme to obtain the transfer amounts. We apply these methods to Egypt in 2013. Recentered Influence Function (RIF) regressions focusing on the poor correspond to the most efficient transfer scheme. Most of the efficiency gain is obtained by making transfer amounts varying across beneficiaries rather than by varying estimation methods. Using RIF regressions instead of quantile regressions delivers only marginal poverty alleviation, although it allows for substantial reduction of the exclusion of the poor.

Mots clés : targeting, poverty, optimizing estimator
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2018-01
The Causal Effect of Infrastructure Investments on Income Inequality: Evidence from US States
Emma Hooper, Sanjay Peters, Patrick A. Pintus

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.

Mots clés : public infrastructure, highways, income inequality, US state panel data, instrument variable
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2017-44
Why Are Inflation Forecasts Sticky? Theory and Application to France and Germany
Frédérique Bec, Raouf Boucekkine, Caroline Jardet

This paper proposes a theoretical model of forecasts formation which implies that in presence of information observation and forecasts communication costs, rational professional forecasters might find it optimal not to revise their forecasts continuously, or at any time. The threshold time- and state-dependence of the observation review and forecasts revisions implied by this model are then tested using inflation forecast updates of professional forecasters from recent Consensus Economics panel data for France and Germany. Our empirical results support the presence of both kinds of dependence, as well as their threshold-type shape. They also imply an upper bound of the optimal time between two information observations of about six months and the co-existence of both types of costs, the observation cost being about 1.5 times larger than the communication cost.

Mots clés : forecast revision, binary choice models, information and communication costs
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2017-43
Measuring Influence in Science: Standing on the Shoulders of Which Giants?
Antonin Macé

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.

Mots clés : intellectual influence, networks, comparability across fields, axiomatic method
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2017-42
Optimal Voting Rules under Participation Constraints
Antonin Macé, Rafael Treibich

We study the design of voting rules for international unions when countries’ participation is voluntary. While efficiency recommends weighting countries proportionally to their stakes, we show that accounting for participation constraints entails overweighting some countries, those for which the incentive to participate is the lowest. When decisions are not enforceable, cooperation requires the satisfaction of more stringent constraints, that may be mitigated by granting a veto power to some countries. The model has important implications for the problem of apportionment, the allocation of voting weights to countries of differing populations, where it provides a rationale for setting a minimum representation for small countries.

Mots clés : international unions, constitutional design, veto, participation constraints
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2017-41
Biodiversity, Shapely Value and Phylogenetic Trees: Some Remarks
Hubert Stahn

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.

Mots clés : biodiversity, phylogenetic trees, Shapley value, Fair Proportion index
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2017-40
Income Distribution by Age Group and Productive Bubbles
Xavier Raurich, Thomas Seegmuller

The aim of this paper is to study the role of the distribution of income by age group on the existence of speculative bubbles. A crucial question is whether this distribution may promote a bubble associated to a larger level of capital, i.e. a productive bubble. We address these issues in a three period overlapping generations (OC) model, where productive investment done in the first period of life is a long term investment whose return occurs in the following two periods. A bubble is a short term speculative investment that facilitates intertemporal consumption smoothing. We show that the distribution of income by age group determines both the existence and the effect of bubbles on aggregate production. We also show that fiscal policy, by changing the distribution of income, may facilitate or prevent the existence of bubbles and may also modify the effect that bubbles have on aggregate production.

Mots clés : bubble, efficiency, income distribution, overlapping generations
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2017-39
Fertility Regulation Behavior: Sequential Decisions in Tunisia
Olfa Frini
Christophe Muller

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.

Mots clés: fertility regulation, age at marriage, birth control, contraception, Tunisia
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2017-38
Application of the Ecosystem Service Concept to a Local-Scale: The Cases of Coralligenous Habitats in the North-Western Mediterranean Sea
Laure Thierry de Ville d'Avray, Dominique Ami, Anne Chenuil, Romain David, Jean-Pierre Féral

In an era when we witness the erosion of biodiversity it is essential to understand the benefits provided by ecosystems and find ways to maintain them. The concept of ecosystem service has been applied in this perspective, but mainly in large-scale surveys and on terrestrial ecosystems. The primary objective of this project is to validate the inclusion of the concept of ecosystem service as a useful input to local (small-scale) community decision making in the marine environment. A second objective is to define the beneficial services provided to local areas by the coralligenous habitats. The application of the concept of ecosystem service at a local scale is more appropriate to local regulatory and management issues. This research was focused on the complex and threatened coralligenous habitats, about which the benefits and services provided are relatively little understood. To address these issues and get around the paucity of prior research, we collected the opinions of 43 experts for two marine sites (Bay of Marseille and Port-Cros National Park) on 15 services using interviews, an online questionnaire and workshops. This work validated 10 services: the most evident were "food", "diving sites", "research" and "inspiration". We also showed that even in very close-by sites, slight differences in the bundle of services may occur, and we highlighted knowledge gaps especially concerning those services (so-called regulating services) that help to regulate environmental impacts of other phenomena. This work concluded that there is a strong need to employ a referential frame to identify and then estimate services based on local criteria such as: geographical and temporal scale, size of the population of beneficiaries, value of the benefits, and state of ecosystem well-being. These results are a basis for further evaluation of these ecosystem services and can indicate their positive contribution to local decision-making concerning the regulation and management of coralligenous habitats.

Mots clés : experts knowledge, Marseille, Port-Cros, appraisals, interviews, workshops, questionnaire, coralligenous habitats, ecosystem services, local-scale, concept application
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2017-37
Regulation and Altruism
Izabela Jelovac, Samuel Kembou Nzale

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.

Mots clés : altruism, Moral Hazard, adverse selection, regulator-agent joint production
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2017-36
Procedural versus Opportunity-Wise Equal Treatment of Alternatives: Neutrality Revisited
Ali Ihsan Ozkes, M. Remzi Sanver

We revisit the neutrality requirement in social choice theory. We propose a weakening of the standard neutrality condition, by allowing for different procedural treatment for different alternatives while entailing that alternatives enjoy same ex-ante possibility to be chosen. We compare these two conditions theoretically and computationally. Furthermore, we explore social choice problems in which this weakening resolves impossibilities that stem from a fundamental tension between neutrality and anonymity. Finally, we show that in certain social choice problems, this weakening provides an immediate refinement of anonymous, neutral, and Pareto optimal social choice rules towards retaining resoluteness.

Mots clés : anonymity, neutrality, Pareto optimality, social choice functions
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2017-35
The Corridor’s Width as a Monetary Policy Tool
Guillaume A. Khayat

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.

Mots clés : Monetary policy, interbank market, heterogeneous interbank frictions, the corridor, excess reserves, financial intermediation
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2017-34
Generalized Measures of Polarization in Preferences
Burak Can, Ali Ihsan Ozkes, Ton Storcken

We provide axiomatic characterizations for measures of polarization in profiles of preferences that are represented as rankings of alternatives. Polarization is seen as the extent to which opinions are opposed. We provide characterizations for an extension of this simple intuition on the pairs of alternatives to the cases with more than two alternatives. Our primary generalization allows for different treatment among issues, i.e., pairs of alternatives. Secondly, we show that the characterization result continues to hold when preferences are allowed to attain indifferences. Finally, we show that we can also impose a domain restriction that only allows for single-peaked preferences and retain our characterization. Our results point to a fundamental feature of measures on profile of preferences that are based on pairwise comparisons of alternatives.

Mots clés : polarization, measurement, Social Choice, single-peaked preferences
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2017-33
A Cost-Benefit Approach for Prioritizing Invasive Species
Pierre Courtois, Charles Figuières, Chloe Mulier, Joakim Weill

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.

Mots clés : prioritization, biological invasions, cost/benefit, optimization, diversity
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2017-32
The Impact of a Rise in the Real Estate Transfer Taxes on the French Housing Market
Guillaume Bérard, Alain Trannoy

This paper estimates the effects of an increase in the real estate transfer taxes (RETT) rate from 3.80% to 4.50%, following an optional reform implemented in March 2014 by French départements. Not all the départements implemented the RETT increase, which is the starting point for a natural experiment: using a difference-in-differences design, we estimate two main effects. (1) An anticipation effect a month before the implementation of the reform in order to avoid the RETT increase (timing response). The total tax base increased by 28% just the month before. (2) The classic depressing effect of a tax on the equilibrium quantity (extensive margin response) is estimated to be 7% on average from March 2014 to October 2015. All in all, the average net effect corresponds to a drop of the transactions of 4.6% over a period of ten months following the implementation date. Furthermore, we estimate that the elasticity of the tax revenue to the tax increase is about 0.65, meaning that départements’ tax revenues are still on the increasing side of the Laffer curve.

Mots clés : local government, real estate market, transfer taxes, Natural experiment, anticipation
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2017-31
Optimal Population Growth as an Endogenous Discounting Problem: The Ramsey Case
Raouf Boucekkine, Blanca Martínez, José Ramón Ruiz-Tamarit

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.

Mots clés : Optimal population size, population ethics, optimal growth, endogenous discounting, optimal demographic transitions
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2017-30
A Note on Risk Sharing versus Instability in International Financial Integration: When Obstfeld Meets Stiglitz
Raouf Boucekkine, Benteng Zou

International risk sharing is one of the main arguments in favor of financial liberalization. The pure risk sharing mechanism highlighted by Obstfeld (1994) implies that liberalization is growth enhancing for all countries as it allows the world portfolio to shift from safe low-yield capital to riskier high yield capital. This result is obtained under the assumption that the volatility figures for risky assets prevailing under autarky are not altered after liberalization. This note relaxes this assumption within the standard two-country model with intertemporal portfolio choices, formally incorporating the instability effect invoked by Stiglitz (2000). We show that putting together the pure risk sharing and instability effects in the latter set-up enriches the analysis and delivers predictions more consistent with the contrasted related empirical literature.

Mots clés : optimal growth, financial liberalization, risk sharing, volatility
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2017-29
Choice with Time
João V. Ferreira, Nicolas Gravel

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.

Mots clés : choice behavior, time, revealed preferences, changing preferences, learning by trial-and-error, inertia bias
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2017-28
Promotion through Connections: Favors or Information?
Yann Bramoullé, Kenan Huremovic

Connections appear to be helpful in many contexts such as obtaining a job, a promotion, a grant, a loan or publishing a paper. This may be due to favoritism or to information conveyed by connections. Attempts at identifying both effects have relied on measures of true quality, generally built from data collected long after promotion. This empirical strategy faces important limitations. Building on earlier work on discrimination, we propose a new method to identify favors and information from classical data collected at time of promotion. Under natural assumptions, we show that promotion decisions look more random for connected candidates, due to the information channel. We obtain new identification results and show how probit models with heteroscedasticity can be used to estimate the strength of the two effects. We apply our method to the data on academic promotions in Spain studied in Zinovyeva & Bagues (2015). We find evidence of both favors and information effects at work. Empirical results are consistent with evidence obtained from quality measures collected five years after promotion.

Mots clés : promotion, connections, social networks, favoritism, Information
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2017-27
Generalized Glass Ceilings in the United States – A Stochastic Metafrontier Approach
Khalid Maman Waziri

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.

Mots clés : wage differentials, discrimination, glass ceiling, stochastic frontier, stochastic metafrontier approach, sample selection correction
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2017-26
Growth and Bubbles: The Interplay between Productive Investment and the Cost of Rearing Children
Xavier Raurich, Thomas Seegmuller

As it is documented, investment of households in human capital is negatively related to the number of children individuals will have and requires some loans to be financed. We show that this negative relationship contributes to explain episodes of bubbles that are associated to higher growth rates. This conclusion is obtained in an overlapping generations model where agents choose to invest in a productive asset, that can be interpreted as human capital, and decide their number of children. A bubble allows to smooth consumption and expenses over the life-cycle, and can therefore be used to finance either productive investment or the cost of rearing children. The time cost of rearing children plays a key role in the analysis. If the time cost per child is sufficiently large, households have only a small number of children. The bubble then has a crowding-in effect because it is used to finance productive investment. On the contrary, if the time cost per child is low enough, households have a large number of children. Then, the bubble is mainly used to finance the total cost of rearing children and has a crowding-out effect on investment. Therefore, the new mechanism we highlight shows that a bubble enhances growth only if the economy is characterized by a high rearing time cost per child.

Mots clés : bubble, sustained growth, fertility
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2017-25
Trade Integration and the Polarisation of Eco-Labelling Strategies
Vera Danilina

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.

Mots clés : eco-labelling, Firm heterogeneity, trade integration, voluntary environmental regulation, firms productivity
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2017-24
Arranged Marriages under Transferable Utilities
Pauline Morault

In many societies, marriage is a decision taken at the familial level. Arranged marriages are documented from Renaissance Europe to contemporary rural Kenya, and are still prevalent in many parts of the developing world. However, this family dimension has essentially been neglected by the existing matching literature on marriages. The objective of this paper is to introduce family considerations into the assignment game. We explore how shifting decision-making to the family level affects matching on the marriage market. We introduce a new concept of familial stability and find that it is weaker than individual stability. The introduction of families into the marriage market generates coordination problems, so the central result of the transferable utility framework no longer holds: a matching can be family-stable even if it does not maximize the sum of total marital surpluses. Interestingly, even when the stable matching is efficient, family decision-making drastically modifies how the surplus is shared-out. These results may have fundamental implications for pre-marital investments. We find that stable matchings depend on the type of family partitioning. Notably, when each family contains one son and one daughter, familial and individual stability are equivalent.

Mots clés : marriage, family, matching, transferable utility
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2017-23
Optimal Taxation to Correct Job Mismatching
Guillaume Wilemme

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.

Mots clés : anti-redistributive taxation, composition externality, job quality, mismatch, search strategy
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2017-22
Working and Women’s Empowerment in the Egyptian Household: The Type of Work and Location Matter
Clémentine Sadania

This paper explores the impact of women’s work on empowerment in Egypt. Existing evidence suffers from several limitations, which I attempt to address. First, I develop an instrumental variable strategy to account for the endogeneity of work. Second, I allow for a heterogeneous impact of work, distinguishing between working in the public sector, outside work in the private sector and home-based work. Third, women’s empowerment is directly measured as their participation in household decisions. Outside work has the greatest impact. Interestingly, home-based work enhances joint decision-making. Distinguishing between urban and rural residence reveals distinct patterns of impact on decision-making.

Mots clés : women’s empowerment, employment, household decision-making
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2017-21
The Role of Inbound Tourist Flows in Promoting Exports
Zouheir El-Sahli

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.

Mots clés : tourism, globalization, trade, gravity, terrorism
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2017-20
The Sources of Segregation
Florent Dubois

Few studies tried to quantify the relative importance of each determinants of residential segregation. This mainly comes from a reverse causality problem which hampers the identification of the quantity of interest. In this paper, we decompose the whole change in segregation between 2001 and 2011 in South Africa by using segregation curves. We show that, even without an experimental setting (which might be impossible to obtain), identification of the causal effects can still be achieved by using the dynamics of the phenomenon. The provision of basic public services appears to be one of the main explanation of the gap observed, while differences in sociodemographic characteristics play a minor role only for the least segregated neighborhoods. Housing market is responsible for an important part only among neighborhoods intermediately integrated, while past segregation and income influence moderately segregation throughout more than half of the South African neighborhoods.

Mots clés : post-apartheid South Africa, generalized decompositions, residential segregation, causal inference
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2017-19
Decomposing Well-being Measures in South Africa: The Contribution of Residential Segregation to Income Distribution
Florent Dubois, Christophe Muller

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.

Mots clés : post-apartheid South Africa, generalized decompositions, income distribution, residential segregation
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2017-18
Segregation and the Perception of the Minority
Florent Dubois, Christophe Muller

In his seminal work, Schelling (1971) shows that even individual preferences for integration across groups may generate high levels of segregation. However, this theoretical prediction does not match the decreasing levels of segregation observed since the 1970s. We construct a general equilibrium model in which preferences depends on the number of peers and unlike individuals, but also on the benefit (or loss) they attribute to the economic and social life that a minority member brings with him, which we call their “perception of the minority”. In this framework, there always exists a structure of the preferences for which integrated equilibria emerge and are stable. Even when individuals are all prejudiced against other groups, there is still a level of the perception of the minority for which integration is a stable outcome. We then propose an econometric specification in which the structural preference parameters can be identified. In the case of South Africa, our estimates of preferences provide evidence for a dynamics toward increasing integration as the effect of the perception of the minority is found positive and significant, and overcome both racism and homophily by between roughly one and four times.

Mots clés : post-apartheid South Africa, residential segregation, racial preferences, structural estimation
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2017-17
Do Misperceptions about Demand Matter? Theory and Evidence
Kenza Benhima, Céline Poilly

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.

Mots clés : Business cycles, information frictions, noise shocks, SVARs with sign restrictions
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2017-16
A Robust Test of Exogeneity Based on Quantile Regressions
Tae-Hwan Kim, Christophe Muller

In this paper, we propose a robust test of exogeneity. The test statistics is constructed from quantile regression estimators, which are robust to heavy tails of errors. We derive the asymptotic distribution of the test statistic under the null hypothesis of exogeneity at a given quantile. Then, the finite sample properties of the test are investigated through Monte Carlo simulations that exhibit not only good size and power properties, but also good robustness to outliers.

Mots clés : regression quantile, endogeneity, Two-Stage Estimation, Hausman test
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2017-15
Ethnic Horizontal Inequity in Indonesia
Christophe Muller

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.

Mots clés : community activities, ethnic diversity, Inequality, Indonesia
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2017-14
Sun, Regulation and Local Social Networks
Antoine Bonleu

The aim of this paper is to explain over-regulation and local social capital as barriers to immigration. The interest of social networks is that conflict resolution is independent of the law. Hence, if local individuals develop local social capital and regulation, foreigners without social networks are disadvantaged and can less easily migrate. We develop a two-country search-theoretic model where we endogenize the choice of procedural formalism (PF) and the network size. This model features two different equilibria: a Mediterranean equilibrium with PF and dense local social network and a Scandinavian and Anglo-Saxon equilibrium without PF and local social networks.

Mots clés : housing market regulation, local social capital, mobility, climate amenities, social networks
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2017-13
Price Discrimination and Dispersion under Asymmetric Profiling of Consumers
Paul Belleflamme, Wing Man Wynne Lam, Wouter Vergote

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.

Mots clés : price discrimination, price dispersion, Bertrand competition
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2017-12
Voluntary Management of Fisheries under an Uncertain Background Legislative Threat
Anne-Sarah Chiambretto, Hubert Stahn

We investigate the possibility for governance authorities to avoid a large part of regulatory costs, by simply backing up social norms with a threat of collective punishment. Specifically, we consider the case of fisheries in which the regulatory cap is to sustain an optimal conservation level. We identify a mandatory regulation such that, when it is used as a threat, it ensures that the cap is voluntarily implemented. The mandatory scheme is based on a incentive mechanism which secures the returns of the harvester, and a tax on potential capacity. From the status of mere threat, this mandatory regulation takes time to be enforced though. We show that such a tax scheme, even if it is applied randomly after the first occurrence of a deviation from the optimal conservation level, ensures voluntary compliance, provided a suitable choice of the capacity tax. We study the properties of this tax scheme and build an example using data on the scallop fishery in the Saint-Brieuc Bay (France) to illustrate our point.

Mots clés : voluntary agreements, fisheries, conservation policies
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2017-11
The Love for Children Hypothesis and the Multiplicity of Fertility Rates
Paolo Melindi Ghidi, Thomas Seegmuller

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.

Mots clés : fertility, love for children, expectations, endogenous growth, balanced growth path
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2017-10
Bayesian Inference for TIP curves: An Application to Child Poverty in Germany
Edwin Fourrier-Nicolai, Michel Lubrano

TIP curves are cumulative poverty gap curves used for representing the three different aspects of poverty: incidence, intensity and inequality. The paper provides Bayesian inference for TIP curves, linking their expression to a parametric representation of the income distribution using a mixture of lognormal densities. We treat specifically the question of zero-inflated income data and survey weights, which are two important issues in survey analysis. The advantage of the Bayesian approach is that it takes into account all the information contained in the sample and that it provides small sample confidence intervals and tests for TIP dominance. We apply our methodology to evaluate the evolution of child poverty in Germany after 2002, providing thus an update the portrait of child poverty in Germany given in Corak et al. 2008.

Mots clés : Bayesian inference, mixture model, survey weights, zero-inflated model, poverty, Inequality
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2017-09
The Value of Biodiversity as an Insurance Device
Emmanuelle Augeraud-Véron, Giorgio Fabbri, Katheline Schubert

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.

Mots clés : biodiversity, stochastic endogenous growth, insurance value, recursive preferences
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2017-08
Condorcet Jury Theorem and Cognitive Hierarchies: Theory and Experiments
Yukio Koriyama, Ali Ihsan Ozkes

An information aggregation problem of the Condorcet Jury Theorem is considered with cognitive hierarchy models in which players would best respond holding heterogeneous beliefs on cognitive level of the other players. Whether the players are aware of the presence of opponents at their own cognitive level turns out to be a key factor for asymptotic properties of the deviation from the Nash behavior, and thence for asymptotic efficiency of the group decision. Our laboratory experiments provide evidence for the self-awareness condition. We obtain an analytical result showing that the difference from the standard cognitive hierarchy models arises when the best-reply functions are asymptotically expanding.

Mots clés : collective decision-making, bounded rationality, cognitive hierarchy, Condorcet Jury Theorem
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2017-07
Directed Search with Phantom Vacancies
James Albrecht, Bruno Decreuse, Susan Vroman

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.

Mots clés : directed search, information persistence, vacancy age
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2017-06
Informal Risk-Sharing Cooperatives: The Effect of Learning and Other-Regarding Preferences
Victorien Barbet, Renaud Bourlès, Juliette Rouchier

We study the dynamics of risk-sharing cooperatives among heterogeneous agents. Based of their knowledge on their risk exposure and the performance of the cooperatives, agents choose whether or not to remain in the risk-sharing agreement. We highlight the key role of other-regarding preferences, both altruism and inequality aversion, in stabilizing less segregated (and smaller) cooperatives. Limited knowledge and learning of own risk exposure also contributes to reducing segregation. Our finding shed light on the mechanisms behind risk-sharing agreements between agents heterogeneous in their risk exposure.

Mots clés : Agent-based, cooperative, risk-sharing, Learning, altruism, other-regarding preferences
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2017-05
What Motivates French Pork: Political Career Concerns or Private Connections?
Brice Fabre, Marc Sangnier

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.

Mots clés : pork-barrel economics, distributive politics, political connections, private connections
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2017-04
HJB Equations in Infinite Dimension and Optimal Control of Stochastic Evolution Equations via Generalized Fukushima Decomposition
Giorgio Fabbri, Francesco Russo

A stochastic optimal control problem driven by an abstract evolution equation in a separable Hilbert space is considered. Thanks to the identification of the mild solution of the state equation as v-weak Dirichlet process, the value processes is proved to be a real weak Dirichlet process. The uniqueness of the corresponding decomposition is used to prove a verification theorem. Through that technique several of the required assumptions are milder than those employed in previous contributions about non-regular solutions of Hamilton-Jacobi-Bellman equations.

Mots clés : weak Dirichlet processes in infinite dimensions, stochastic evolution equations, generalized Fukushima decomposition, stochastic optimal control in Hilbert spaces
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2017-03
Hammond’s Equity Principle and the Measurement of Ordinal Inequalities
Nicolas Gravel, Brice Magdalou, Patrick Moyes

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.

Mots clés : ordinal inequality, Hammond equity axiom, leximin, antileximax
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2017-02
Equality among Unequals
Mathieu Faure, Nicolas Gravel

This paper establishes an equivalence between three incomplete rankings of distributions of income among agents that are vertically differentiated with respect to some other non-income characteristic (health, household size, etc.). The first ranking is that associated with the possibility of going from one distribution to the other by a finite sequence of income transfers from richer and more highly ranked agents to poorer and less highly ranked ones. The second ranking is the unanimity of all comparisons of two distributions made by a utilitarian planer who assumes that agents convert income into utility by the same function exhibiting a marginal utility of income that is decreasing with respect to both income and the source of vertical differentiation. The third ranking is the Bourguignon (1989) ordered poverty gap dominance criterion.

Mots clés : equalization, transfers, heterogenous agents, poverty gap, Dominance, utilitarianism
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2017-01
Entrepreneurial Motivation and Business Performance: Evidence from a French Microfinance Institution
Renaud Bourlès, Anastasia Cozarenco

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.

Mots clés : opportunity and necessity entrepreneurs, business microcredit, loan repayment, business survival
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2016-44
Scrambled Questions Penalty in Multiple Choice Tests: New Evidence from French Undergraduate Students
Morgan Raux, Marc Sangnier, Tanguy Van Ypersele

This note evaluates the scrambled questions penalty using multiple choice tests taken by first-year undergraduate students who follow a microeconomics introductory course. We provide new evidence that students perform worse at scrambled questionnaires than at logically ordered ones. We improve on previous studies by explicitly modeling students individual skills thanks to a fixed effects regression. We further show that the scrambled questions penalty does not differ along gender but varies along the distribution of students’ skills and mostly affects students with lower-intermediate skills.

Mots clés : multiple choice tests, scrambled questions, student performance
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2016-43
Absolute Qualified Majoritarianism: How Does the Threshold Matter?
Ali Ihsan Ozkes, M. Remzi Sanver

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.

Mots clés : simple majority rule, qualified majority rules
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2016-42
Education Politics, Schooling Choice and Public School Quality: The Impact of Income Polarisation
Majda Benzidia, Michel Lubrano, Paolo Melindi-Ghidi

Do communities with the same level of inequality but a different level of income polarisation perform differently in terms of public schooling? To answer this question, we extend the theoretical model of schooling choice and voting developed by de la Croix and Doepke (2009), introducing a more general income distribution characterised by a three-member mixture instead of a single uniform distribution. We show that not only income inequality, but also income polarisation, matters in explaining disparities in public education quality across communities. Public schooling is an important issue for the middle class, which is more inclined to pay higher taxes in return for better public schools. Contrastingly, poorer households may be less concerned about public education, while rich parents are more willing to opt-out of the public system, sending their children to private schools. Using micro-data covering 724 school districts of California and introducing a new measure of income polarisation, we find that school quality in low-income districts depends mainly on income polarisation, while in richer districts it depends mainly on income inequality.

Mots clés : schooling choice, income polarisation, probabilistic voting, education politics, Bayesian inference
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2016-41
Growth and Agglomeration in the Heterogeneous Space: A Generalized AK Approach
Raouf Boucekkine, Giorgio Fabbri, Salvatore Federico, Fausto Gozzi

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.

Mots clés : growth, agglomeration, heterogeneous and continuous space, capital mobility, infinite dimensional optimal control problems
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2016-40
Is it Better to Work When We Are Older? An Empirical Comparison Between France and Great Britain
Kadija Charni

Classical literature uses the cross-sectional age-earnings profile to describe how the earnings evolve over the life cycle. Using a cohort analysis, I argue that this interpretation of age-earnings profile is not correct. I show that the cohort effects largely explain the decline observed at older ages. I illustrate this point by using a rotating panel data from France and a British longitudinal panel dataset for the period 1991 to 2007. I find no clear evidence that the earnings decline at older age, although the profiles are different between countries. Earnings for French workers rise linearly with age, with a further increase at the end of career, while it becomes flat for older workers in Great Britain. Overlapping cohorts provide an explanation of the observed decline of earnings for older workers in cross-sectional data. This suggests that cross-section age-earnings profile fails to represent the individual age-earnings profile.

Mots clés : age-earnings profile, older workers, cohort analysis
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2016-39
The Tree that Hides the Forest: A Note on Revealed Preference
João V. Ferreira

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.

Mots clés : revealed preference theory, rationalization, dichotomous preferences, aggregation rules, choice data
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2016-38
Israel's Open-Secret Trade
Lorenzo Rotunno, Pierre-Louis Vézina

This paper uncovers and quantifies Israel’s exports to countries that ban trade with Israel. Israel exported a total of $6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion’s share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel’s exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.

Mots clés : trade policy, Israel, illegal trade
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2016-37
Implementation of the Lindahl Correspondance via Simple Indirect Mechanisms
Hassan Benchekroun, Charles Figuières, Mabel Tidball

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).

Mots clés : Lindahl allocations, mechanism design
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2016-36
Job Protection, Housing Market Regulation and the Youth
Antoine Bonleu, Bruno Decreuse, Tanguy Van Ypersele

Young Europeans experience high unemployment rates, job instability and late emancipation. Meanwhile they do not support reforms weakening protection on long-term contracts. In this paper, we suggest a possible rationale for such reform distaste. When the rental market is very regulated, landlords screen applicants with regard to their ability to pay the rent. Protecting regular jobs offers a second-best technology to sort workers, thereby increasing the rental market size. We provide a model where non-employed workers demand protected jobs despite unemployment and the share of short-term jobs increase, whereas rents, wages and the individual risk of dismissal are unaffected.

Mots clés : labor market dualism, rent default, screening
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2016-35
Political Connections and Insider Trading
Thomas Bourveau, Renaud Coulomb, Marc Sangnier

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.

Mots clés : political connections, white-collar crime, insider trading
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2016-34
Wage Inequality and Skill Supplies in a Globalised World
Lorenzo Rotunno, Adrian Wood

We investigate empirically, and explain theoretically, how the relative wages of skilled and unskilled workers vary with their relative supplies in open economies. Our results resolve a conflict between the predictions of standard trade theory and experience of how labour markets work. We show that relative wages respond to variation in relative skill supplies in countries that trade, as intuition and much other evidence suggest, but also that the wage response decreases as trade barriers fall and that, as trade theory suggests, is weak in very open economies.

Mots clés : Heckscher-Ohlin, trade and wages, wage inequality, labour markets
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2016-33
Production Networks
Kenan Huremovic, Fernando Vega-Redondo

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.

Mots clés : production, networks, distortions, centrality, profit
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2016-32
Employment, Hours and the Welfare Effects of Intra-Firm Bargaining
Maarten Dossche, Vivien Lewis, Céline Poilly

Intra-firm bargaining between a multiple-worker firm and an individual employee leads to overhiring. Taking advantage of the decreasing returns to scale in employment, the firm can reduce the marginal product by hiring an additional worker, thereby reducing the bargaining wage paid to all existing employees. We show that this externality is amplified when firms can adjust hours per worker as well as employment. Hours are too low at the steady state. This misallocation of labor leads to sizeable welfare losses. Our finding is important for economies in which hours adjustment play an important role as it does in many Euro Area countries.

Mots clés : intra-firm bargaining, distortions, optimal monetary policy
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2016-31
La Visibilité comme Ressource dans la Gouvernance des Circuits Courts : Une Approche Institutionnaliste de l'Évaluation pour l'Observatoire des Circuits Courts de PACA
Noé Guiraud, Juliette Rouchier

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.

Mots clés : observatoire, Institutional Analysis and Developement, visibilité, circuits courts
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2016-30
Non-Existence of Optimal Programs in Continuous Time
Giorgio Fabbri, Silvia Faggian, Giuseppe Freni

We report an example of a two-dimensional undiscounted convex optimal growth model in continuous time in which, although there is a unique "golden rule", no overtaking optimal solutions exists in a full neighborhood of the steady state. The example proves, for optimal growth models, a conjecture advanced in 1976 by Brock and Haurie that the minimum dimension for non-existence of overtaking optimal programs in continuous time is 2.

Mots clés : optimal growth, overtaking, continuous time models
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2016-29
Inequality, Educational Choice and Public School Quality in Income Mixing Communities
Paolo Melindi-Ghidi

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.

Mots clés : Inequality, probabilistic voting, segregation, income mixing equilibrium
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2016-28
A Bayesian Look at American Academic Wages: The Case of Michigan State University
Majda Benzidia, Michel Lubrano

The paper investigates academic wage formation inside Michigan State University and develops tools in order to detect the presence of possible superstars. We model wage distributions using a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distributions for higher wages, using a Bayesian approach, particularly well adapted for inference in hybrid mixtures. The presence of superstars is detected by studying the shape of the Pareto tail. Contrary to usual expectations, we did found some evidence of superstars, but only when recruiting Assistant Professors. When climbing up the wage ladder, superstars disappear. For full professors, we found a phenomenon of wage compression as if there were a higher bound, which is just the contrary of a superstar phenomenon. Moreover, a dynamic analysis shows that many recruited superstars did not fulfill the university expectations as either they were not promoted or left for lower ranked universities.

Mots clés : academic market, wage formation, superstars, tournaments theory, Bayesian inference, hybrid mixtures
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2016-27
Power-Law Distribution in the External Debt-to-Fiscal Revenue Ratios: Empirical Evidence and a Theoretical Model. Appendices
Gilles Dufrenot, Anne-Charlotte Paret-Onorato

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.

Mots clés : power-law, stochastic growth, external debt, emerging countries
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2016-26
Violence against Rich Ethnic Minorities: A Theory of Instrumental Scapegoating
Yann Bramoullé, Pauline Morault

In many parts of the developing world, ethnic minorities play a central role in the economy. Examples include Chinese throughout Southeast Asia, Indians in East Africa and Lebanese in West Africa. These rich minorities are often subject to popular violence and extortion, and are treated ambiguously by local politicians. We analyze the impact of the presence of a rich ethnic minority on violence and on interactions between a rent-seeking local elite and a poor majority. We find that the local elite can always make use of the rich minority to maintain its hold on power. When the threat of violence is high, the government may change its economic policies strategically to sacrifice the minority to popular resentment. We investigate the conditions under which such instrumental scapegoating emerges, and the forms it takes. We then consider some social integration capturing, for instance, mixed marriages and shared education. Social integration reduces violence and yields qualitative changes in economic policies. Overall, our results help explain documented patterns of violence and segregation.

Mots clés : elites, popular violence, ethnic minority, scapegoat
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2016-25
"The Falling Sperm Counts Story": A Limit to Growth?
Johanna Etner, Natacha Raffin, Thomas Seegmuller

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.

Mots clés : Pollution, growth, fertility, Health
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2016-24
Viable Nash Equilibria in the Problem of Common Pollution
Noël Bonneuil, Raouf Boucekkine

Two countries produce goods and are penalized by the common pollution they generate. Each country maximizes an inter-temporal utility criterion, taking account of the pollution stock to which both contribute. The dynamic is in continuous time with possible sudden switches to less polluting technologies. The set of Nash equilibria, for which solutions also remain in the set of constraints, is the intersection of two manifolds in a certain state space. At the Nash equilibrium, the choices of the two countries are interdependent: different productivity levels after switching lead the more productive country to hasten and the less productive to delay the switch. In the absence of cooperation, efforts by one country to pollute less motivate the other to pollute more, or encourage the country that will be cleaner or less productive country after switching to delay its transition.

Mots clés : Pollution, dynamic game, Nash, viability theory
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2016-23
On the Number of Social Reforms in MENA Economies
Christophe Muller, Klarizze Anne Martin Puzon

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.

Mots clés : social protection, welfare programs, Middle-East and North-Africa
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2016-22
Heterogeneous Entrepreneurs, Government Quality and Optimal Industrial Policy
Michele Di Maio, Giorgio Fabbri, Vincenzo Lombardo

This paper presents a theoretical model exploring the effects of industrial policy (IP) when entrepreneurs are characterized by different ability levels and sectors are heterogeneous as for their profitability and social externalities generated. The optimal structure of IP in terms of monetary transfers is shown to crucially depend on the distribution of entrepreneurs abilities. Moreover, we find that IP increases aggregate welfare under very general conditions, also in the presence of Government failures. In an extension of the model, we consider the case in which the Government can use also the provision of business training to entrepreneurs as an additional instrument of IP. Based on these results, policy implication for industrial policy in developing countries are discussed.

Mots clés : industrial policy, entrepreneurs, heterogeneous abilities, training
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2016-21
Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US
Bruno Decreuse, Linas Tarasonis

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.

Mots clés : Learning, screening discrimination, job search, indirect inference
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2016-20
The Changing Nature of Gender Selection into Employment: Europe over the Great Recession
Juan J. Dolado, Cecilia Garcia-Peñalosa, Linas Tarasonis

The aim of this paper is to evaluate the role played by selectivity issues induced by nonemployment in explaining gender wage gap patterns in the EU since the onset of the Great Recession. We show that male selection into the labour market, traditionally disregarded, has increased. This is particularly the case in peripheral European countries, where dramatic drops in male unskilled jobs have taken place during the crisis. As regards female selection, traditionally positive, we document mixed findings. While it has declined in some countries, as a result of increasing female LFP due to an added-worker effect, it has become even more positive in other countries. This is due to adverse labour demand shifts in industries which are intensive in temporary work where women are over-represented. These adverse shifts may have more than offset the rise in unskilled female labour supply.

Mots clés : sample selection, Gender Wage Gap
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2016-19
Is the Distribution of Cardiovascular Risks Really Improving ? A Robust Analysis for France.
Fatiha Bennia, Nicolas Gravel

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.

Mots clés : Risk, Dominance, ex ante social welfare, state-dependent expected utility, poverty, Health, cardiovascular diseases
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2016-18
The Value of Network Information: Assortative Mixing Makes the Difference
Mohamed Belhaj, Frédéric Deroïan

We study the value of network information in a context of monopoly pricing in the presence of local network externalities. We compare a setting in which all players, i.e. the monopoly and consumers, know the network structure and consumers' private preferences with a setting in which players only know the joint distribution of preferences, in-degrees and out-degrees. We give conditions under which network information increases profit or/and consumer surplus. The analysis reveals the crucial role played by four properties: degree assortativity, homophily (in preferences), preference-degree assortativity and preference-Bonacich centrality assortativity.

Mots clés : monopoly, network effects, price discrimination, Bonacich Centrality, network information, degree assortativity, homophily, preference-degree assortativity, preference-Bonacich centrality assortativity
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2016-17
Liquidity Trap and Stability of Taylor Rules
Antoine Le Riche, Francesco Magris, Antoine Parent

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.

Mots clés : cash-in-advance, liquidity trap, Monetary policy, Multiple equilibria
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2016-16
Infinite Dimensional Weak Dirichlet Processes and Convolution Type Processes
Giorgio Fabbri, Francesco Russo

The present paper continues the study of infinite dimensional calculus via regularization, started by C. Di Girolami and the second named author, introducing the notion of weak Dirichlet process in this context. Such a process X, taking values in a Banach space H, is the sum of a local martingale and a suitable orthogonal process. The concept of weak Dirichlet process fits the notion of convolution type processes, a class including mild solutions for stochastic evolution equations on infinite dimensional Hilbert spaces and in particular of several classes of stochastic partial differential equations (SPDEs). In particular the mentioned decomposition appears to be a substitute of an Itô’s type formula applied to to f(t, X(t)) where f : [0, T ] × H → R is a C0,1 function and X a convolution type processes.

Mots clés : covariation and quadratic variation, calculus via regularization, infinite dimensional analysis, tensor analysis, Dirichlet processes, generalized Fukushima decomposition, convolution type processes, stochastic partial differential equations
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2016-15
Inefficient Lock-in with Sophisticated and Myopic Players
Aidas Masiliunas

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.

Mots clés : game theory, Learning, lock-in, farsightedness, coordination
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2016-14
Conditional Expected Utility Criteria for Decision Making under Ignorance or Objective Ambiguity
Nicolas Gravel, Thierry Marchant, Arunava Sen

We provide an axiomatic characterization of a family of criteria for ranking completely uncertain and/or ambiguous decisions. A completely uncertain decision is described by the set of all its consequences (assumed to be finite). An ambiguous decision is described as a finite set of possible probability distributions over a finite set of prices. Every criterion in the family compares sets on the basis of their conditional expected utility, for some probability function taking strictly positive values and some utility function both having the universe of alternatives as their domain.

Mots clés : Ignorance, Ambiguity, conditional probabilities, expected utility, Ranking Sets, axioms
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2016-13
Household Fuel Use in Developing Countries: Review of Theory and Evidence
Christophe Muller, Huijie Yan

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.

Mots clés : household decisions, fuel transition, energy consumption
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2016-12
Democracy for Polarized Committees: The Tale of Blotto's Lieutenants
Alessandra Casella, Jean-François Laslier, Antonin Macé

In a polarized committee, majority voting disenfranchises the minority. By allowing voters to spend freely a fixed budget of votes over multiple issues, Storable Votes restores some minority power. We study a model of Storable Votes that highlights the hide-and-seek nature of the strategic game. With communication, the game replicates a classic Colonel Blotto game with asymmetric forces. We call the game without communication a decentralized Blotto game. We characterize theoretical results for this case and test both versions of the game in the laboratory. We find that, despite subjects deviating from equilibrium strategies, the minority wins as frequently as theory predicts. Because subjects understand the logic of the game – minority voters must concentrate votes unpredictably – the exact choices are of secondary importance. The result is an endorsement of the robustness of the voting rule.

Mots clés : Storable Votes, polarization, Colonel Blotto, tyranny of the majority, committees
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2016-11
Currency Diversification of Banks: A Spontaneous Buffer Against Financial Losses
Justine Pedrono

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.

Mots clés : Basel III, bank, financial integration, financial stability, currency diversification, financial volatility
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2016-10
Banks' Capital Structure and US Dollar Diversification of Assets: Does Reduction in Systemic Risk Offset Agency Costs?
Justine Pedrono, Aurélien Violon

Multinational Corporation (MNCs) should gain advantage from international diversification by lowering their systemic risk and reducing their bankruptcy cost. Hence, internationalization should induce larger leverage. However, it may imply additional agency costs due to wider informal gaps and higher cost of investigation induced by the multiplication of markets. To examine how currency diversification of asset may change the bank’s systemic risk, we provide a theoretical framework based on relative CAPM by introducing explicitly the exchange rate risk. Due to exchange rate dynamics asset diversification may reduce systemic risk even through the two assets are perfectly correlated. Using innovative micro data on credit institutions located in France between 1999 and 2014 we expand our analysis to the net effect of US dollar diversification of assets. Contrary to past studies, this measure of financial internationalization take into consideration the exchange rate risk. Although our results highlight the two opposite effects of diversification, they posit the importance of international agency costs in the capital structure decision.

Mots clés : bank, capital structure, leverage, currency, diversification, internationalization
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2016-09
Overcoming Coordination Failure in a Critical Mass Game: Strategic Motives and Action Disclosure
Aidas Masiliunas

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.

Mots clés : lock-in, coordination failure, Learning, strategic teaching, Information, collective action, critical mass
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2016-08
Variable Markups in the Long-Run: A Generalization of Preferences in Growth Models
Raouf Boucekkine, Hélène Latzer, Mathieu Parenti

This paper introduces variable mark-ups in a horizontal-differentiation growth model by considering a larger class of preferences that nests the classic “CES” specification usually present in the workhorse love-for-variety models. Our first result is to obtain a generalized characterization of the Euler condition for this broader class of utility functions: in our model, the Euler rule features a supplementary term aiming at compensating the consumer for variations in the preference for variety along the consumption level. We are then also able to demonstrate that in our generalized framework, the economy’s balanced growth path displays both endogenous markups and a strictly positive growth rate of the number of available varieties (being the engine of growth). Finally, we show that under endogenous markups, the economy’s growth rate and firms’ market power can display a negative correlation, as opposed to the standard result obtained in the CES framework.

Mots clés : endogenous growth, variable markups, indirectly additive preferences
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2016-07
Sunspot Fluctuations in Two-Sector Models with Variable Income Effects
Frédéric Dufourt, Kazuo Nishimura, Carine Nourry, Alain Venditti

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.

Mots clés : Indeterminacy, sunspots, income and substitution effects, sector-specific externalities, infinite-horizon two-sector model
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2016-06
Growth and Public Debt: What Are the Relevant Tradeoffs?
Kazuo Nishimura, Carine Nourry, Thomas Seegmuller, Alain Venditti

The interplay between growth and public debt is addressed considering a Barro-type [1] endogenous growth model where public spending is financed through taxes on income and public debt. Debt is assumed to be a fixed proportion of GDP which is used as a policy parameter by the government. We first show that when debt is a large enough proportion of GDP, two distinct BGPs may co-exist, one being indeterminate. Therefore, local and global indeterminacy may arise and self-fulfilling expectations appear as a crucial ingredient to understand the impact of debt on growth and on macroeconomic fluctuations. We then exhibit two types of important trade-off associated with self-fulfilling expectations. First, we show that the lowest BGP is always decreasing with respect to the ratio of debt/GDP while the highest one is increasing. As a result, depending on the BGP selected by agents’ expectations, the relationship between debt and growth is not always negative. Second, we show that the highest BGP, which provides the highest welfare, is always locally indeterminate while the lowest is always locally determinate. Therefore, depending on the expectations of agents, when debt is increasing, large fluctuations associated to self-fulfilling believes may occur and be associated at the same time with welfare losses if there is a coordination on the low steady-state. Finally, a simple calibration exercise allows to provide an understanding of the recent experiences of many OECD countries.

Mots clés : endogenous growth, public spending, public debt, sunspot fluctuations
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2016-05
The Wild West is Wild: The Homicide Resource Curse
Mathieu Couttenier, Pauline Grosjean, Marc Sangnier

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.

Mots clés : homicide, resource curse, mineral discoveries, US
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2016-04
Protectionism and the Education-Fertility Trade-off in Late 19th Century France
Vincent Bignon, Cecilia Garcia-Peñalosa

The assumption that education and fertility are endogenous decisions that react to economic circumstances is a cornerstone of the unified growth theory that explains the transition to modern economic growth, yet evidence that such a mechanism was in operation before the 20th century is limited. This paper provides evidence of how protectionism reversed the education and fertility trends that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, led to a substantial increase in agricultural wages, thus reducing the relative return to education. Since the importance of cereal production varied across regions, we use these differences to estimate the impact of the tariff. Our findings indicate that the tariff reduced education and increased fertility. The magnitude of these effects was substantial, and in regions with large shares of employment in cereal production the tariff offset the time trend in education for up to 15 years. Our results thus indicate that even in the 19th century, policies that changed the economic prospects of their offspring affected parents’ decisions about the quantity and quality of children.

Mots clés : Education, fertility, unified growth theory, protectionism, France
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2016-03
L’Observatoire Régional des Circuits Courts : Un Dispositif de Coordination pour une Gouvernance Alimentaire Régionale
Noé Guiraud, Juliette Rouchier

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.

Mots clés : observatoire, proximité organisée, dispositif de coordination, circuits courts
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2016-02
The French Pension Reforms and their Impact on Unemployed Older Workers
Kadija Charni

This paper analyzes labour market position of unemployed older individuals after the implementation of two major pension reforms in France. We use the French Force Labour Survey for the period 2003-2011 to assess the effects of the 2003 and the 2010 pension reforms on the exit rate from unemployment of individuals aged over 54. Using a difference-in-differences approach, we look at the effects of these reforms on the exit from unemployment to employment, and into inactivity. We find that the 2003 pension reform reduces significantly the exit to employment, while there is no significant impact of the pension reform on the exit to inactivity. For the 2010 reform, we show that the reform leads to an increase of the probability to go back to work. At the same time, the transition out of labour force through inactivity exit also rises. Unemployment and other social schemes are used as a bridge to retire early.

Mots clés : pension reforms, unemployed older workers, difference-in-differences estimation
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2016-01
Multidimensional Poverty in Seychelles
Christophe Muller, Asha Kannan, Roland Alcindor

The typically used multidimensional poverty indicators in the literature do not appear to be relevant for middle-income countries like Seychelles and can yield unrealistic estimates of poverty. In particular, the deprivations typically considered in such measures little occurs in middle-income economies. In this paper, we propose a new approach to measuring multidimensional poverty in Seychelles based on a mix of objective and subjective information about households living conditions, and on how these households view their spending priorities. The empirical results based on our new approach show that a small but non-negligible minority of Seychellois can be considered as multidimensionally poor, mostly as not being able to satisfy their shelter and food basic needs. Finally, the Seychelles social aid programs run by the Agency for Social Protection is poorly targeted whether evaluated in terms of multidimensional poverty or in terms of one-dimensional monetary poverty.

Mots clés : poverty, multidimensional wellbeing, destitution, Seychelles
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2015-01
Contracting on Networks
Mohamed Belhaj, Frédéric Deroïan

A principal offers bilateral contracts to a set of agents organized in a network conveying synergies, in a context where agents' efforts are observable and where the principal's objective increases with the sum of efforts. We characterize optimal contracts as a function of agents' positions on the network. The analysis shows that contract enforceability is key to understand optimality. We also examine linear contracting and we analyze the situation where the principal is constrained to contract with a single agent on the network. Last, we extend this setting to network entry.

Mots clés : optimal contracting, multi-agency, Network, Strategic Complementarity, enforceability
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