WORKING PAPERS 2022

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2022-27

The spatial determinants of innovation diffusion: evidence from global shipping networks

César Ducruet, Hidekazu Itoh

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Abstract
Based on untapped shipping and urban data, this article compares the diffusion of steam and container shipping at the port city level and at the global scale between 1880 and 2008. A temporal and multi-layered network is constructed, including the pre-existing technologies of sailing and breakbulk. The goal is to check the differences a) between innovations and their predecessors and b) between innovations, from an urban network perspective. Main results show that despite certain differences, such as historical context, voyage length, speed of diffusion, and geographical spread, the two innovations share a large quantity of similarities. They both fostered port concentration, were boosted by city size and port connectivity, bypassed upstream port sites, and diverged gradually from older technologies. This research thus contributes to the literature on cities, networks, innovation, and maritime transport.
Mot(s) clé(s)
containerization; maritime transport; port cities; regional disparity; spatial networks; steam shipping; technological change
2022-26

A Positive Effect of Uncertainty Shocks on the Economy: Is the Chase Over ?

Nicolas Himounet, Francisco Serranito, Julien Vauday

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Abstract
How large and persistent are the effects of uncertainty shocks on the economy? Are the effects of macroeconomic uncertainty shocks different from those of financial uncertainty shocks? In the empirical literature there was a consensus on an estimated negative impact
of uncertainty on macroeconomic variables. Recently, some studies identifying shocks with a novel methodology, namely the events constraint approach, find that macroeconomic uncertainty shocks may trigger an increase in the industrial production. The goal of this paper
is to question this striking result. We have identified two main shortcomings in this literature that could explain the positive correlation between macroeconomic uncertainty and economic activity. We show that this method of identification can be sensitive depending
on how to identify and select the structural uncertainty shocks in a SVAR model. Our main conclusion is that the controversial result of a positive effect of macroeconomic uncertainty on economic activity does not yet seem to be proven. Whether financial or macroeconomic,
there is no evidence allowing for rejection of the hypothesis that they have a negative impact on economic activity.
Mot(s) clé(s)
Uncertainty, SVAR, Narrative Sign Restrictions, Economic Activity
2022-25

Consumer sovereignty in the digital society

Alexandre Chirat

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Abstract
Do uses of digital technologies in the framework of early 21st century capitalism promote or reduce the expression of consumer sovereignty ? This paper addresses this question through the lens of John Kenneth Galbraith’s theory of consumption. First, I recall the main stakes of his theory. Second, I highlight the main differences between traditional advertising and online behavioral advertising. Third, I explain how online behavioral advertising strengthens the “dependence effect” and “revised sequence” depicted by Galbraith within the context of the industrial society. Fourth, I discuss some normative challenges raised by digital platform corporations to individual sovereignty. Lastly, I argue that platform capitalism appear as a mature form of the “new industrial state”, one important difference being that digital platform corporations, rather than traditional industrial corporations, largely preside over the allocation of resources in the economy.
Mot(s) clé(s)
Consumer sovereignty – online behavioral advertising - digital economics – platform capitalism
2022-24

Commodity currencies revisited: The role of global commodity price uncertainty

Theodora Bermpei, Laurent Ferrara, Aikaterina Karadimitropoulou, Athanasios Triantafyllou

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Abstract
Exchange rates of commodity exporting countries, generally known as commodity currencies, are often considered to be driven by some specific commodity prices. In this paper, we show that the uncertainty common to a basket of commodity prices is also a significant driver of exchange rate dynamics for a panel of commodity exporting countries. In particular, a positive shock on global commodity price uncertainty leads to a short-run depreciation of the effective exchange rate in commodity currency countries, followed by a medium-term overshooting. We document that this pattern is specific to commodity currencies and is not visible on benchmark currencies like the euro or the U.S. dollar, the latter acting as a typical safe haven currency. We refer to this pattern as the “commodity uncertainty currency” property.
Mot(s) clé(s)
Commodity currencies, Uncertainty co-movement, Commodity prices, SVAR model
2022-23

Optimizing portfolios in the illiquid, unlisted market of SME crowdlending

Bastien Lextrait

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Abstract
Portfolio construction for SME crowdloans is challenging. This market is illiquid, unlisted and with scarce historical data of asset development. Consequently, traditional portfolio optimization techniques cannot be applied as is since risks can only be assessed individually and covariance matrices are not available. We propose a new portfolio optimization framework based on estimated risk clustering rather than asset variance-covariance matrix. We first establish risk profiles for each company through SHAP-decomposing its estimated risk. We use correlation-like metrics to compare risk profiles to one another and group similar risk profiles together using hierarchical clustering. We then apply quadratic optimization on the generated groups to minimize risk variance. We simulate investments using real data to quantify our strategy’s return, based on the SMEs market share neglected by banks. Our method overperforms traditional mean-variance optimization adapted at best on our sample, as well as 1/N naive investment strategy which has regularly proven its efficiency. Our method rewards any risk-averse investor profile with higher returns.
Mot(s) clé(s)
Portfolio optimization, crowdlending, SMEs, SHAP values, hierarchical clustering
2022-22

Determinants of the Digital Divide: Evidence from France

Mathilde Aubouin

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Abstract
The COVID-19 crisis accelerated the digital transition and reinforced households' existing digital divide. This paper aims to identify determinants of digital inequalities in access, usage, and type of usage in France and the reasons for the non-access to the internet. Using French Institute of Statistics (INSEE) surveys between 2007 and 2019, we show that generation, education, and income are significant determinants of digital consumption. The gender digital gap exists only among older generations. The digital divide is mainly a problem of internet access in France. Disparities in usage narrow once an individual has access to and uses the internet. Based on our results, we recommend investing in digital education and implementing financial support to reduce the digital divide.
Mot(s) clé(s)
Digital Divide; Internet use; Internet access; Pseudo-panel methods; France
2022-21

Environmental Subsidies to Mitigate Transition risk

Eric Jondeau, Grégory Levieuge, Jean-Guillaume Sahuc, Gauthier Vermandel

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Abstract
We explore the role of public subsidies in mitigating the transition risk associated with a climate-neutral objective by 2060. We develop and estimate an environmental dynamic stochastic general equilibrium model for the world economy featuring an endogenous market structure for green products. We show that public subsidies, financed by a carbon tax, are an efficient instrument to promote firm entry into the abatement goods sector by fostering competition and lowering the selling price of such products. We estimate that the subsidy, optimally distributed between startups at 60% and existing companies at 40%, will save nearly $2.9 trillion in world GDP each year by 2060.
Mot(s) clé(s)
Climate change, E-DSGE model, Bayesian estimation, stochastic growth, endogenous market structure, environment-related products
2022-20

Incentives to differentiate under environmental liability laws : Product customization and precautionary effort

Andreea Cosnita-Langlais, Eric Langlais

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Abstract
We endogenize location/product specification choices in a spatial Cournot duopoly on the linear market, when firms' output entails an accidental harm to the environment. Under a strict liability regime, the equilibrium involves no differentiation when the expected harm is low enough. This outcome is suboptimal, and identical to the spatial pattern obtained under a no-liability regime. With larger harm, the equilibrium displays some dispersion/product differentiation, the degree of which is increasing with the level of harm towards the first best locations/product choices. Our results are robusts when allowing for firms' investment in environmental measures. Moreover, we show that vertical/care differentiation occurs whenever horizontal product differentiation arises. Finally, we show that under a negligence rule, firms always comply with the due care level, but the equilibrium involves no differentiation, either horizontal/product or vertical/care.
Mot(s) clé(s)
Cournot competition, spatial model, strategic location, product choice, horizontal differentiation, vertical differentitation, environmental liability, strict liability, negligence.
2022-19

Not all political relation shocks are alike: Assessing the impacts of US-China tensions on the oil market

Yifei Cai, Valérie Mignon, Jamel Saadaoui

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Abstract
This paper assesses the effects of US-China political tensions on the oil market. Relying on a quantitative measure of these relationships, we investigate how their dynamics impact oil demand, supply, and prices over various periods, starting from 1971 to 2019. To this end, we estimate a structural vector autoregressive model as well as local projections and show that political tensions between the two countries pull down oil demand and raise supply at medium- and long-run horizons. Overall, our findings show that conflicting relationships between these two major players in the oil market may have crucial impacts, such as the development of new strategic partnerships.
Mot(s) clé(s)
China, Oil market, Political relations
2022-18

Endogenous market structures, product liability, and the scope of product differentiation

Andreea Cosnita-Langlais, Eric Langlais

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Abstract
The paper considers how product liability may shape firm size, product specification choices and market structure. We introduce a spatial Cournot duopoly on the linear market, where firms make an initial decision of product differentiation, then invest in precaution, before competing in quantity. Our main results are fourfold; 1) with full coverage of the market by the duopoly, there exist two equilibria (in pure strategies): central agglomeration (which is stable for low liability costs), and dispersion (which is stable for not too large liabiliy costs); 2) for larger liability costs, a mixed market structure duopoly/monopoly sustains a unique equilibrium with product differentiation; 3) this equilibrium enables a scope of differentiation higher (smaller) than the full duopoly (the social optimum); 4) the impact of liability costs on firms size and profits is complex, since it depends on the impact on both product differentiation and market structure. Finally, we show that consumer surplus and social welfare are both higher under the mixed market structure than under the full duopoly in an equilibrium with product differentiation.
Mot(s) clé(s)
horizontal differentiation, Cournot competition, spatial model, endogenous market structures, product liability, strict liability, negligence
2022-17

Inland cities, maritime gateways, and international trade

César Ducruet, David Guerrero

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Abstract
This research discusses the different spatial configurations of the nexus between inland city and port gateway. A comparative analysis of 64 inland capital cities is proposed based on port, transport, trade, and urban indicators. The obtained trends suggest that there is a trade-off between remoteness and trade openness, which differentiates three clusters of inland cities: major logistics hubs, constrained metropolises, and underdeveloped corridors. We review more qualitatively intermodalism and port choice issues along six selected corridors.
Mot(s) clé(s)
corridor; freight flows; maritime transport; port hinterland; trade openness; urban system
2022-16

Shaky foundations Central bank independence in the 21st century

Jérôme Deyris, Gaëtan Le Quang, Laurence Scialom

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Abstract
Central bank independence (CBI) has often been presented as a superior institutional arrangement demonstrated by economists in the 1980s for achieving a common good in a non-partisan manner. In this article, we argue that this view must be challenged. First, research in the history of economic facts and thought shows that the idea of CBI is not new, and was adopted under peculiar socio-historical conditions, in response to particular interests. Rather than an indisputable progress in economic science, CBI is the foundation for a particular configuration of the monetary regime, perishable like its predecessors. Secondly, we argue that the simplistic case imagined by the CBI theory (the setting of a single interest rate disconnected from political pressures) is long overdue. For nearly two decades, central banks have been increasing their footprint on the economy, embarking on large asset purchase programs and adopting macroprudential policies. This pro-activism forces independent central banks to constantly address new distributional - and therefore political - issues, leading to a growing number of criticisms of their actions with regard to inequality or climate change. This growing gap between theory and practices makes plausible a further shift of the institutional arrangement towards a democratization of monetary policy.
Mot(s) clé(s)
central bank independence, monetary policy, macroprudential policy
2022-15

Spatial network analysis of container port operations: the case of ship turnaround times

César Ducruet, Hidekazu Itoh

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Abstract
This research investigates the determinants of ship turnaround times at about 2,300 container ports between 1977 and 2016, based on nearly 3 million daily vessel movements. It adopts a multilevel approach combining territorial and network indicators to characterize ports, and proposes a new methodology calculating shipping delays. Main results reveal that port connectivity, Gross Domestic Product per capita, the number of vessel calls, and island location foster efficient port operations. Conversely, urban population, voyage delays at sea, maximum ship size, and upstream location increase turnaround time. While average turnaround time and inter-port sailing time have both regularly declined, operational and technological changes in the ports and maritime sector - especially after the 2007/8 global financial crisis - accelerated intra-port time and slowed down inter-port time. This relational and spatial approach also underlines the geographic differentiation of ship times nationally and regionally, as it is far from being randomly distributed on the globe.
Mot(s) clé(s)
congestion; containerization; liner shipping networks; port cities; ship turnaround time; uncertainty
2022-14

Infectious disease and endogenous cycles: lockdown hits two birds with one stone

David Desmarchelier, Magali Jaoul-Grammare, Guillaume Morel, Thi Kim Cuong Pham

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Abstract
This paper develops a competitive Ramsey-Cass-Koopmans framework in which an infectious disease evolves according to a simple SIS model. It aims at examining how the lockdown a§ects infectious disease persistence, individual welfare, and economic dynamics. In contrast to the existing literature, two types of infectives are introduced: (1) symptomatic and (2) asymptomatic. While the former is assumed to be too ill to work, the latter supply their labor and spread the disease. The government imposes a lockdown as an instrument to control the disease spread. In the long
run, when the contamination rate of the disease is relatively high and the share of asymptomatics is low enough, the lockdown is welfare improving regardless of the degree of household empathy toward infectives. Moreover, a stable limit cycle can emerge near the endemic steady-state, through a Hopf bifurcation, when the share of infectives increases sufficiently the marginal utility of consumption. Particularly, we prove that it is possible to tune the lockdown to simultaneously obtain the limit cycle disappearance and the disease eradication (Bogdanov-Takens bifurcation). In this sense, the lockdown allows hitting two birds with one stone.
Mot(s) clé(s)
Bogdanov-Takens bifurcation, Hopf bifurcation, Lockdown, Ramsey model, SIS model
2022-13

Composite effects of human, natural and social capitals on sustainable food-crop farming in Sub-Saharan Africa

Chinh Hoang-Duc, Tuan Nguyen-Anh, Phu Nguyen-Van, Tuyen Tiet, Nguyen To-The

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Abstract
This study analyzes the spontaneous impact of human, social and natural capital on food crop technical efficiency (TE) in Sub-Saharan Africa (SSA). Our study contributes to the literature by adopting the meta-analysis method to investigate the relationship between TE and the three groups of capitals to better shed light on the TE in SSA regions. Our results highlight that social capital is the most critical factor among the three groups of capitals in promoting farming productivity. In particular, agriculture efficiency benefits from increasing people’s trust in institutions and the frequency of extension visits. Natural capital like temperature and elevation is essential in determining the farming TE in SSA regions. Outstandingly, our results also indicate that calorie intake, a proxy of labor quality, should be improved to achieve better productivity.
Mot(s) clé(s)
Farming technical efficiency; Human capital; Meta-analysis; Natural capital; Social capital; Sub-Saharan Africa
2022-12

Maritime trade and economic development in North Korea

César Ducruet, In Joo Yoon

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Abstract
The North Korean economy is experiencing a deepening economic and political crisis since the early 1990s. Although North Korea is not commonly seen as a shipping nation, its major cities are coastal, and it hosts nine international trading ports. However, little is known about the role of maritime transport in its development. This article uses vessel movement data to reconstitute the maritime network linking North Korean ports and other ports, over the period 1977-2021. Besides the drastic connectivity loss, main results conclude about a limited role of maritime transport in economic development, except for its participation to China's increasing grip on North Korea. This research brings new knowledge about North Korea and contributes to advance maritime network studies in general.
Mot(s) clé(s)
multivariate analysis, international trade, maritime connectivity, network analysis
2022-11

Herbert Simon’s experience at the Cowles Commission (1947–1954)

Michaël Assous, Olivier Brette, Alexandre Chirat, Judith Favereau

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Abstract
Surprisingly Simon’s activities at the Cowles commission remain largely unexplored; while Simon and the Cowles shared a twofold wish to operationalize economics and to formalize human decision making. This is also during his time at the Cowles commission that Simon produces his emblematic paper formalizing bounded rationality. Furthermore, Simon claims that his participation at the Cowles was decisive in his awarding of the Nobel Prize. The aim of the paper is to produce such scrutiny. As such the claim of the paper is that Simon’s relationship with the Cowles commission and its members was a bittersweet one. Indeed, such a collaboration started enthusiastically from both sides and ended surrounded by indifferences. We offer three explanations to this bittersweet relationship. First, both the Cowles and Simon shared a wish to formalize decision making problems; although, they had different conceptions about mathematical tools and the articulation between theory and empirics. Second, the irreconcilability of their conception of optimality threatened their common interest in operational research. Third, and more globally, Simon’s and the Cowles’s research agendas were not stabilized during this period explaining the enthusiastic phase as well as the cold one, once these two research agendas stabilized, but in different directions. The paper distinguishes four periods from 1947 to 1954 during Simon’s time at the Cowles. Each section of the paper deals in turn with one of these four periods.
Mot(s) clé(s)
Simon – Cowles Commission – Rationality – Optimization – Models
2022-10

Lost in Negative Territory? Search for Yield!

Mattia Girotti, Guillaume Horny, Jean-Guillaume Sahuc

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Abstract
We study how negative interest rate policy (NIRP) affects banks’ loan pricing. Using contract-level data from France, we show that NIRP affects bank lending rates to firms through a portfolio rebalancing channel: banks holding a one standard deviation more of cash and central bank reserves offer a 8.6 basis points lower loan rate after NIRP is introduced. The impact concentrates on medium-term loans (with maturity comprised between three and six years) but not on loans to risky firms, indicating that banks conduct a search for yield focused on term spreads. These findings suggest that NIRP complements quantitative easing policies.
Mot(s) clé(s)
Negative interest rates, portfolio rebalancing, search for yield, term spreads, banks
2022-9

Measurement of total factor productivity: Evidence from French construction firms

Abdoulaye Kané

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Abstract
This paper reviews eight (8) methods of calculating total factor productivity (TFP) in the "construction of residential and non-residential buildings" sector in France. These include fixed-effects estimators; instrumental variables and the generalized method of moments (Blundell and Bond, 1999); Olley and Pakes, 1996; Levinsohn and Petrin, 2003; Wooldridge, 2009; Ackerberg, Caves, and Frazer, 2015; the calibration method; and the data envelopment analysis (DEA) method. Then, using firm-level data from 2009 to 2018, we show that the market structure can be likened to an oligopoly situation and that capital intensity is also very low in this sector. Furthermore, the fixed-effects estimator provides the lowest capital coefficient and overestimates both the absolute value of the scale effect and the intermediate inputs coefficient. The highest capital coefficient is provided by the Wooldridge (2009) estimator. But there is little difference between the TFP measures, especially when semi-parametric methods are used. While the calibration of elasticities shows that the construction sector is labor intensive, the DEA method shows that on average only large firms are fully efficient. To our knowledge, the Ackerberg, Caves and Frazer method be a good estimator of TFP in the French construction sector. Finally, when comparing TFP levels, all estimation methods (fixed effects; Wooldridge, 2009; Olley and Pakes, 1996; Levinsohn and Petrin, 2003 and Ackerberg, Caves, and Frazer, 2015) are strongly positively correlated with each other (over 92%). However, the correlations between these methods and the non-parametric methods (DEA and calibration methods) are very low, even negative with the calibration method.
Mot(s) clé(s)
French construction sector; Production function; Total factor productivity; Parametric estimation; Semi-parametric estimation; Non-parametric estimation; Market structure
2022-8

Winners and Losers of the COVID-19 Pandemic: An Excess Profits Tax Proposal

Céline Azémar, Rodolphe Desbordes, Paolo Melindi-Ghidi, Jean-Philippe Nicolaï

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Abstract
In this paper, we study the gains and losses incurred during the COVID-19 pandemic. We distinguish between the effects of the pandemic and those of the health measures implemented to reduce the death toll, notably ‘the lockdown’. Our theoretical model is focused on within-sector firm heterogeneity and involves imperfect competition in a partial equilibrium setting. A comparison between the gains and losses triggered by both the pandemic and the lockdown indicates that an excess profits tax imposed on the ‘winners’ could partly compensate the ‘losers’ of the same sector.
Mot(s) clé(s)
Excess profits, COVID-19, Lockdown, Imperfect competition, Transfers.
2022-7

The case of financial and banking integration of Central, Eastern and South Eastern European countries: A gravity model approach

Léonore Raguideau-Hannotin

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Abstract
The motivation of this article is to understand the determinants of banking integration of non-Euro CESEE EU Members. One stylized fact for these economies is the building up of external financial vulnerabilities since the beginning of the Transition period, with a large weight of cross-border banking, particularly with the European Union. In relation with the literature on the impact of gross financial flows on financial stability, we therefore estimate the long-term historical, geographical and cultural determinants of cross-border banking claims with a bilateral financial gravity model. We then analyze the impact of domestic (pull), foreign (push) and global factors using the gravity framework. Our results first show that cross-border banking in these economies is significantly driven by geographical proximity and common historical links, particularly with EU Member States. Second, we find that banking sector health variables are more significant as push factors, while structural banking system variables are more significant as pull factors. These results provide evidence in favor of an impact of European banking systems on financial liabilities in this region, in relation with the very high level of EU ownership of banking assets. Finally, US global liquidity factor matters more than exchange rate stability, which points towards policy dilemma effect in the region.
Mot(s) clé(s)
Gravity model, cross-border banking, Central Eastern and South Eastern European countries, European Union, push factors, pull factors, global factors, EU, CESEE
2022-6

A robust structural electric system model with significant share of intermittent renewables under auto-correlated residual demand

Pierre Cayet, Arash Farnoosh

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Abstract
In this paper, we propose a robust structural investment and dispatch model of electric systems including commitment and storage constraints under auto-correlated residual demand. We associate it to a novel approach to robust optimization focusing on uncertainty parameter trajectories. Using Principal Component Analysis, we approximate conditional order statistics for the differential distribution of components of residual demand using parametric polynomial regression. This flexible method allows us to derive a set of extreme trajectories maximizing the level and variability of residual demand. Finally, we apply our dynamic robust model to the electric system of the French region Auvergne Rhône-Alpes and discuss the implications in terms of investment decisions and cost performance.
Mot(s) clé(s)
Optimal electricity mix; Robust optimization; Dynamic uncertainty
2022-5

Nudging for lockdown: behavioural insights from an online experiment

Thierry Blayac, Dimitri Dubois, Sebastien Duchene, Phu Nguyen-Van, Ismael Rafai, Bruno Ventelou, Marc Willinger

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Abstract
We test the effectiveness of a social comparison nudge to enhance lockdown compliance during the Covid-19 pandemic, using a French representative sample (N=1154). Respondents were randomly assigned to a favourable/unfavourable informational feedback (daily road traffic mobility patterns, in Normandy - a region of France) on peer lockdown compliance. Our dependent variable was the intention to comply with a possible future lockdown. We controlled for risk, time, and social preferences and tested the effectiveness of the nudge. We found no evidence of the effectiveness of the social comparison nudge among the whole French population, but the nudge was effective when its recipient and the reference population shared the same geographical location (Normandy). Exploratory results on this subsample (N=52) suggest that this effectiveness could be driven by non-cooperative individuals.
Mot(s) clé(s)
COVID-19; Lockdown compliance; Social Comparison; Nudge; Risk preferences; Time preferences; Social preferences
2022-4

A Tiering Rule to Balance the Impact of Negative Policy Rates on Banks

Mattia Girotti, Benoît Nguyen, Jean-Guillaume Sahuc

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Abstract
Negative interest rate policy makes excess liquidity costly to hold for banks and this may weaken the bank-based transmission of monetary policy. We design a rule-based tiering system for excess reserve remuneration that reduces the burden of negative rates on banks while ensuring that the central bank keeps control of interbank interest rates. Using euro-area data, we show that under the proposed tiering system, the aggregate cost of holding excess liquidity when the COVID-19 monetary stimulus fully unfolds would be more than 36% lower than that under the ECB’s current system.
Mot(s) clé(s)
Negative interest rates, excess liquidity, tiering system, bank profitability, interbank market
2022-3

Assessing the Impact of Basel III: Evidence from Structural Macroeconomic Models

Bora Durdu, Hibiki Ichiue, Yasin Mimir, Jolan Mohimont, Kalin Nikolov, Sigrid Roehrs, Jean-Guillaume Sahuc, Valério Scalone, Michael Straughan, Olivier de Bandt

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Abstract
This paper (i) reviews the different channels of transmission of prudential policy highlighted in the literature and (ii) provides a quantitative assessment of the impact of Basel III reforms using "off-the-shelf" DSGE models. It shows that the effects of regulation are positive on GDP whenever the costs and benefits of regulation are both introduced. However, this result may be associated with a temporary economic slowdown in the transition to Basel III, which can be accommodated by monetary policy. The assessment of liquidity requirements is still an area for research, as most models focus on costs, rather than on benefits, in particular in terms of lower contagion risk.
Mot(s) clé(s)
Basel III reforms, DSGE models, solvency requirements, liquidity requirements
2022-2

Bids for Speed: An empirical Study of Investment Strategy Automation in a Peer-to-Business Lending Platform

Eric Darmon

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Abstract
We investigate how introducing a bidding agent impacts the process and outcome of an online reverse auction in the context of a crowdlending platform. We consider this issue in the context of a peer-to-business platform that connects individual lenders to small and medium-sized enterprises. Using a before/after study design, we perform an econometric analysis and find that introducing a bidding agent had a positive and dramatic impact on the number of bids and bidders and reduced the time necessary to collect the funds. For projects with lower ratings, it also positively impacted the number of lenders and indirectly enhanced portfolio diversification. We find that after the bidding agent was introduced, well-rated projects benefited from lower interest rates, the magnitude of the change depending positively on their rating. These results provide evidence that the bidding agent generates savings in the screening and bidding costs incurred by lenders and benefits both sides of the platform. Our contribution documents the role of bidding agent as a strategic tool to enhance financial intermediation. It also sheds light on how two types of decision support systems (rating-based and bidding agent) interact and shows that this interaction is of crucial importance with respect to the financial regulation of platforms if the crowd has low financial literacy.
Mot(s) clé(s)
decision support system; crowdlending; bidding agent; online reverse auction.
2022-1

The case for a Carbon Border Adjustment: Where do economists stand?

Marc Baudry, Alienor Cameron

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Abstract
On 14 July 2021, the European Commission formally adopted a proposal for a Carbon Border Adjustment Mechanism to mitigate the risk of carbon leakage caused by its increasingly ambitious environmental policies. There is a gap between the ways in which this issue is discussed in political spheres and the evidence provided by economic literature on it. The aim of this paper is to bridge this gap by presenting the context and policy debate surrounding carbon leakage and CBAs in the EU, reviewing the state of the economic literature on this topic, and discussing further research that is necessary to answer remaining policy concerns and unresolved research questions.
Mot(s) clé(s)
climate policy, carbon border adjustment, carbon leakage
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