Publications: Working papers

Publications: Working papers 2019

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2019-1 "Fostering, Child Welfare, and Ethnic Cultural Values"

Eliane El Badaoui, Lucia Mangiavacchi

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Abstract
This article examines the interdependence of the fostering status of children, their school attendance and their labour supply in host families in Niger. We appreciate the ethnic cultural heritage of fostering, a phenomenon assumed to be rooted in the long run and transmitted along generations. The focus is on the effects of fostering on children's outcomes. We specify a simultaneous equations model with three outcomes for children (school attendance, hours of market work and hours of domestic work) and a treatment variable (fostering). The results show that foster children are more likely to attend school and to have longer hours of domestic work than biological children. Importantly, we find evidence of a schooling fostering for boys and a domestic fostering for girls. All in all, ethnic inherited values and behaviours are found to have an important role in perpetuating fostering institution and on children's welfare.
Classification-JEL
J13; J22; O12; C34
Mot(s) clé(s)
Child fostering; Culture; Child labour; Domestic work; Schooling; Niger
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2019-2 "Evaluating the Macroeconomic Effects of the ECB's Unconventional Monetary Policies"

Sarah Mouabbi, Jean-Guillaume Sahuc

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Abstract
We quantify the macroeconomic effects of the European Central Bank’s unconventional monetary policies using a DSGE model which includes a set of shadow interest rates. Extracted from the yield curve, these shadow rates provide unconstrained measures of the overall stance of monetary policy. Counterfactual analyses show that, without unconventional measures, the euro area would have suffered (i) a substantial loss of output since the Great Recession and (ii) a period of deflation from mid-2015 to early 2017. Specifically, year-on-year inflation and GDP growth would have been on average about 0.61% and 1.09% below their actual levels over the period 2014Q1-2017Q2, respectively.
Classification-JEL
E32, E44, E52.
Mot(s) clé(s)
Unconventional monetary policy, shadow policy rate, DSGE model, euro area.
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2019-3 "Mitigation strategies under the threat of solar radiation management"

Fabien Prieur, Martin Quaas, Ingmar Schumacher

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Abstract
The option to tackle climate change by means of Solar Radiation Management (SRM) is mostly thought to reduce efforts of mitigating greenhouse gas emissions. Here we hypothesize that (i) a unilateral threat to employ SRM can induce players to commit to strategies with increased mitigation effort compared to what would be observed at the Nash equilibrium in emission strategies only and (ii) there exists a way to share the burden imposed by commitment to avoid SRM that Pareto dominates an alternative that would involve too high current emission levels then followed by future SRM deployment. To study these hypotheses we develop a two-region, two-stage, two-period game where regions choose mitigation and SRM. While SRM targets regional climate preferences, in line with current scientific evidence its deployment leads to uncertain damages on the other region. We first develop the general theory and then study a more specific linear-quadratic application. Finally we calibrate the model to real-world data and find that hypothesis (ii) holds for plausible values.
Classification-JEL
C72, Q54
Mot(s) clé(s)
climate change, solar radiation management, heterogeneous damages, strategic interaction, commitment
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2019-4 "On the impact of capital and liquidity ratios on financial stability"

Pierre Durand

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Abstract
In response to the 2007-2008 global financial crisis, the G20 mandated the Basel Committee to put in place prudential regulations capable of ensuring financial stability: the Basel III agreements. This paper tackles this issue by investigating the impact of capital and liquidity ratios on financial stability for a sample of 1600 banks from 23 countries over the 2005-2016 period. We pay particular attention to the nonlinear character of this potential effect through the estimation of a polynomial model with interaction terms and a panel smooth transition regression. Distinguishing between different types of banks depending on their level of systemicity, we find evidence of a nonlinear effect of prudential ratios on financial stability: a low level of capital improves financial stability, but its effect tends to diminish for higher values. Finally, we show that bank profitability is a significant determinant of financial stability.
Classification-JEL
C33, G21, G38
Mot(s) clé(s)
Basel III ratios ; financial stability ; interaction effects ; Panel Smooth Transition Regression
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