The industrial cost of fixed exchange rate regimes

Blaise Gnimassoun, Carl Grekou, Valérie Mignon

Premature deindustrialization in most emerging and developing economies is one of the most striking stylized facts of the recent decades. In this paper, we provide solid empirical evidence supporting that the choice of a fixed exchange rate regime accelerates this phenomenon. Relying on a panel of 146 developed, emerging, and developing countries over the 1974-2019 period, we show that fixed exchange rate regimes have had a negative, significant, and robust effect on the size of the manufacturing sector —developing countries being the most affected by the industrial cost of such a regime. Additional gravity model regressions show that the impact of fixed regimes passes through the trade channel. In particular, this regime has kept countries with low relative productivity in a state of structural dependence on imports of manufactured products to the detriment of the emergence of a strong local manufacturing sector.
Mot(s) clé(s)
Exchange rate regimes; (De)industrialization; Manufacturing; Developing countries; Emerging economies

Policy-induced low-carbon innovations for buildings: A room for standards? Evidence from France

Valentin Laprie

Low-carbon technical change in the building sector is a promising solution to address the challenges of climate change, energy security, and public health. We aim to investigate the effects of various environmental policies on low-carbon innovation in the building sector where strong investment barriers transpire, focusing on France as a case study. Pollution taxes, subsidies, standards, which induce more low-carbon innovation? Using a quality index for patents and a Polynomial Distributed Lag Model, our results suggest a limited impact of a carbon tax on promoting low-carbon innovation within the building sector in France. Moreover, our findings indicate that subsidies targeting less polluting technologies emerge as a primary driver of qualitative innovation. Additionally, our study reveals that energy standards for buildings exert a significant albeit temporary influence on the number of patents in relevant technological domains.
Mot(s) clé(s)
Environmental Policy, Technical Change, Patents, Energy Efficiency, Buildings

Corruption and leadership in Africa: Evidence from Burkina Faso

Harouna Sedgo

This study assesses the role of a leader in anti-corruption fighting in Africa. It focuses on the rule of Thomas Sankara, one of the legendary figures of contemporary Africa.

Using the synthetic control approach, we design a counterfactual for the actual Burkina Faso called "synthetic Burkina Faso" based on corruption before Sankara's tenure. The difference between Burkina Faso and Synthetic Burkina Faso highlights that the leadership of Thomas Sankara had a substantial effect in reducing corruption in Burkina Faso during his tenure over the period 1983-1987. This reduction effect in 1987 was as much as 70 percent of the 1982 level of corruption in the country. This result is robust to placebo tests.

This finding highlights the leader's importance in shaping African countries' institutional trajectory. To fight corruption, having an exemplary leader is a cure.
Mot(s) clé(s)
Corruption; Leader; Captain Thomas Sankara; Synthetic control approach; Burkina Faso

Economie du policing – le cas d’une police de tranquillité publique, la nouvelle police municipale de Paris

Zoltán Szücs

This article proposes to present the state of affairs of French municipal police forces, and to provide a review of the relevant scientific literature at the moment of the creation of the municipal police of Paris. This municipal police was born in a context of low levels of sense of insecurity, but high levels of different kinds of public nuisance, justifying the focus of its activities on the disturbances of public tranquillity. To keep this focus, one of the major issues is to maintain a clear and complementary share of competences with the forces of the national police. However, our article alerts on some difficulties to do so : according to our estimates on panel data, increasing municipal police force size are on average accompanied by a simultaneous drop in the national police force size on a local level in France, generating a substitution effect. In addition, a series of operational choices – in terms of recruitment, equipment, resource allocation – will impact if the new municipal police can efficiently address the issues of public tranquillity, which also depends on the level of trust and legitimacy recognized by the population.
Mot(s) clé(s)
policing ; municipal police ; public policies ; security ; public tranquillity

Reconciling contrasting views on the growth effect of currency undervaluations

Cécile Couharde, Carl Grekou, Valérie Mignon, Florian Morvillier

This paper provides an in-depth analysis of the link between exchange rate misalignments and economic growth for a large sample of 170 countries over the 1973-2019 period. We rely on new cross-country data on multilateral currency misalignments and cross-quantile regressions to demonstrate that the seemingly divergent views of the Washington Consensus and the export-led growth theory on the role of currency undervaluations in promoting economic growth can be reconciled. Although any significant departures from the equilibrium exchange rate levels are found undesirable, we show that undervaluations are more likely to stimulate economic growth in developing countries. However, this positive impact is observed only up to certain thresholds of development level and currency undervaluation. Consequently, strategies in the poorest countries that systematically undervalue currencies in real terms to foster growth should be carefully tailored, as they raise the risk for these economies of switching from a positive to a less favorable growth regime, depending on both their specific wealth level and the extent of their currency undervaluation.
Mot(s) clé(s)
Cross-quantile regressions; economic growth; multilateral currency misalignments; undervaluations.

Revisiting 15 Years of Unusual Transatlantic Monetary Policies

José Garcia-Revelo, Grégory Levieuge, Jean-Guillaume Sahuc

The European Central Bank and the Federal Reserve introduced new policy instruments and made changes to their operational frameworks to address the global financial crisis (2008) and the Covid-19 pandemic (2020). We study the macroeconomic effects of these monetary policy evolutions on both sides of the Atlantic Ocean by developing and estimating a tractable two-country dynamic stochastic general equilibrium model. We show that the euro area and the United States faced shocks of different natures, explaining some asynchronous monetary policy measures between 2008 and 2023. However, counterfactual exercises highlight that all conventional and unconventional policies implemented since 2008 have appropriately (i) supported economic growth and (ii) maintained inflation on track in both areas. The exception is the delayed reaction to the inflationary surge during 2021-2022. Furthermore, exchange rate shocks played a significant role in shaping the overall monetary conditions of the two economies.
Mot(s) clé(s)
Monetary policy, real exchange rate dynamics, two-country DSGE model, Bayesian estimation, counterfactual exercises

The Hicksian Traverse

Christian Bidard

We consider the disturbances due to the introduction of a new machine in an economy moving on a regular path. Hicks names traverse the intertemporal path leading from the present to another regular path. The dynamics depend on the characteristics of the old and the modern techniques. We simplify and extend Hicks' analysis, which relies on a neo-Austrian model, and show that the conditions for the existence of a full employment traverse are restrictive.
Mot(s) clé(s)
Austran model, technical change, employment, traverse

Price controls against “greedflation”: lessons from the debate over incomes policy

Basile Clerc

Why do some economists support price controls in the face of inflation during peacetime? Our thesis is that, in the history of economic thought, understanding the role of profits in inflationary dynamics is the crucial variable. To demonstrate this, we investigate the extensive literature on incomes policy, insofar as much of the thinking on macroeconomic price controls in peacetime is part of this literature. This corpus is crossed by a major schism: some advocate price and wage controls while others limit control to wages alone. We show that the defense of price controls is always based on the thesis that profits play an autonomous role in inflationary dynamics. Conversely, the advocates of an incomes policy reduced to wage controls see margins as mere transmission belts for excessive wage increases into prices. Price controls are thus rejected ex ante, even before any criticism of the consequences of their application.
Mot(s) clé(s)
Price controls - Wage controls - Incomes policy - Inflation - Unemployment

Product Liability Influences Incentives for Horizontal Mergers

Andreea Cosnita-Langlais, Tim Friehe, Eric Langlais

This paper shows how product liability rules influence merger incentives. Consumers’ misperception of product risk critically influences which liability rule induces the strongest merger incentives. When consumers overestimate product risk, merger incentives under negligence and strict liability are similar and weaker than under no liability. When consumers underestimate product risk, merger incentives under negligence are weaker than those under strict liability but stronger than those under no liability.
Mot(s) clé(s)
Liability; Merger; Cournot; Market Structure

Assessing the Impact of National Air Quality Standards on Agricultural Land Values: Insights from Corn and Soybean Regions

Cécile Couharde, Rémi Generoso

We examine the impact of the National Ambient Air Quality Stan-
dards, as defined by the Clean Air Act, on agricultural land values
within the corn and soybean regions of the United States. To achieve
this objective, agricultural census data on farmland values are com-
bined with pollution exposure metrics as defined by the Environmen-
tal Protection Agency. Using a difference-in-differences approach and
conducting various robustness checks, we find that compliance with air
quality standards has a statistically significant negative effect on agri-
cultural land values at the county level. Moreover, evidence from quan-
tile regression analysis suggests that counties in the lower quantiles fail
to translate the economic and environmental benefits of pollution re-
duction into increased farmland values, unlike their counterparts with
the highest-valued lands.
Mot(s) clé(s)
Air Quality Standards; Agricultural Land Values; Difference- in-Differences; Quantile Regression

Économie de guerre climatique : de quoi parle-t-on ?

Alexandre Chirat, Basile Clerc

The concept of a necessary transition to a "war economy" in response to the ecological crisis is gaining traction. However, this discussion often overlooks the fact that a war economy primarily relies on policies such as price controls and rationing, as exemplified by the United States' economy during World War II. Whether it's for wartime efforts or addressing climate urgency, both scenarios seem justifying the suspension of market mechanisms in key sectors to achieve production goals while mitigating the social costs of transition. Nonetheless, a significant disparity lies in the social acceptability of such political measures, which proves to be considerably more challenging to establish within the context of the climate and ecological crisis.
Mot(s) clé(s)
Ecological transition - war economy - price controls

Disposition à payer pour l’assurance contre les risques naturels: une étude de terrain au Burkina Faso

Guibril Zerbo

This article examines the determinants of willingness to pay (WTP) for flood insurance, focusing on the role of information and information sources. We use data from a September 2022 field survey of 593 individuals in urban Burkina Faso. We find that 71.3% of individuals are willing to spend money on insurance. But many individuals have a lower willingness to pay than the expected loss. This suggests that individuals would appreciate insurance cover, but do not have sufficient income to pay the insurance premium. We also find that being well informed about flood risk increases the likelihood of paying the expected loss for insurance. However, obtaining flood information from television increases WTP whereas radio does not. These results suggest the need to take information sources into account when developing effective communication policies against these risks. Another result is that recourse to the family and risk aversion reduce PAD. Finally, trust in insurers and ambiguity aversion increase individuals' chances of paying the expected loss for insurance.
Mot(s) clé(s)
Natural disasters, Flood risk; Insurance, Willingness to pay; Information

Moving apart: job-driven residential mobility and the gender pay gap Evidence from a large industrial firm.

Matthieu Bunel, Dominique Meurs, Élisabeth Tovar

This article uses a 15-year panel data set from a large French industrial firm to investigate the role of intra-firm job-driven residential mobility on the gender pay gap of executives. We find that job-driven residential mobility is highly profitable for both male and female workers due to a generous mobility bonus policy, but that it does not affect their careers. We also find that female executives are less likely than males to experience job-driven residential mobility, and that it brings higher gains to male relative to female executives. However, these differences between men and women linked to the mobility allowance make limited contribution to the total gender pay gap, which is almost entirely due to other bonuses linked to the positions held.
Mot(s) clé(s)
insider econometrics, personnel economics, gender pay gap, job mobility, residential mobility

Gender Differences in Early Occupational Choices: Evidence from Medical Specialty Selection

Josep Amer-Mestre, Noémi Berlin, Agnès Charpin, Magali Dumontet

This paper analyses gender differences in occupational choices in a setting in which observed matches are solely determined by supply-side factors: the French centralised medical residency selection mechanism. We show that men and women facing the same occupational choice set make drastically different occupational choices. Medical specialties selected by women pay less, have lower time requirements, and are less competitive. To understand these differences and estimate how much of the gender gap in specialty sorting can be explained by individual preferences for job attributes, we administer a survey to prospective medical residents just before their specialty choice. Using both a hypothetical job choice framework and stated preferences, we show that while “hard” job characteristics (earnings, time requirements) only slightly reduce the gender gap in sorting, “soft” characteristics (daily tasks, contact with patients, willingness to help others) play a larger role in reducing the gap. We also find suggestive evidence of an anticipation effect of fertility on women’s career choices. Our results suggest that individual preferences play a determinant role in explaining gender-based occupational segregation.
Mot(s) clé(s)
Occupational segregation, Gender, Labour market, Job attributes, Willingness to pay

Global Value Chains and Productivity: Causal Evidence for Firms Worldwide

Ivan Ledezma, Antonia Lopez Villavicencio

We study how global value chain participation causally affects productivity at the firm level. We utilize an extensive dataset encompassing firms from countries of different income levels over the period 2006-2021, together with matching approaches to control for endogeneity. Our primary finding underscores that the simultaneous coordination of importing and exporting activities within a single firm leads to an increase in labor productivity. Positive effects on TFP are significant only within the subgroup of firms in the less developed countries and those operating in low-tech industries. Increased capital intensity appears as a plausible explanation of labor productivity gains. We also find higher innovation propensity, quality enhancements, and labor-cost reductions for two-way traders as channels through which GVC participation influences firms' technical change. The lower responsiveness of TFP in advanced countries can be explained by the different nature of technical change for firms operating closer to the world technology frontier.
Mot(s) clé(s)
Global value chains, productivity, firm, development, endogeneity

Evaluating criticality of strategic metals: Are the Herfindahl–Hirschman Index and usual concentration thresholds still relevant?

Pauline Bucciarelli, Emmanuel Hache, Valérie Mignon

This paper aims to evaluate the criticality of strategic metals by (i) investigating the validity of the Herfindahl-Hirschman Index (HHI) for assessing the supply risk aspect of criticality and (ii) determining an appropriate threshold for using this indicator in the context of criticality studies. Relying on a large panel of 33 strategic metals over the 1995-2021 period, our findings show that the variation of HHI has more impact on metal prices at lower HHI levels and question the existence of a threshold that clearly distinguishes high-risk markets from less risky ones based on their concentration levels. Overall, we show that using the HHI as a supply risk indicator, especially in conjunction with a threshold, may result in underestimating risks in less concentrated markets.
Mot(s) clé(s)
Strategic metals; Criticality; Herfindahl–Hirschman Index; Metal prices; Panel regression

Que nous apprennent les fichiers SISE au sujet des inégalités de réussite dans l'enseignement supérieur ?

Guillaume Pierné

This study offers a cross sectional assessment of inequalities of success related to gender, nationality and socio professional category in higher education. To this purpose, it uses the exhaustiveness of the data contained in the files of the student monitoring information system for the year 2017-2018. On the basis of meta-regressions, the results suggest that inequalities of success are generalized across subjects and educational establishments, that they are stronger in the first years of training and in medical fields and that their magnitude may vary with the demographic composition of the group of attending students , in particular with the share of students belonging to the references demographic groups
Mot(s) clé(s)
inequalities, academic success, higher education, meta analysis

Synergy in environmental compliance, innovation and export on SMEs' growth

Phu Nguyen-Van, Tuyen Tiet, Quoc Tran-Nam

Although numerous studies examine the impacts of environmental compliance and innovation on a firm's economic performance, the role of export activities in this nexus has remained unanswered. In this study, we revisit the Porter hypothesis by investigating synergy strategies of dierent environmental and economic practices (i.e., environmental compliance, product innovation, process innovation and having export activities) on total factor productivity (TFP) of Vietnamese manufacturing SMEs. Our results suggest that while encouraging either product or process innovation is also essential in the environment-promoting policy, joint implementation of these two practices should be carefully considered by managers. Moreover, entering export markets positively impacts rms' productivity; complying with the domestic/local environmental standards could signicantly increase the chances for SMEs to enter the export markets
Mot(s) clé(s)
Environmental compliance; Export; Product innovation; Process innovation; Productivity; SMEs
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