Research
Work in progress
"Trade Credit and Firms' Financial Vulnerability", with Omar Chafik, Sophie Osotimehin, Abdessamad Saidi and Wenxia Tang
"The Effect of Public Debt on the Convenience Yield: Evidence from Swiss Treasury Auctions", with Maxime Phillot
Completed papers
"Foreign Exchange Interventions with UIP and CIP deviations: The Case of Small Safe Haven Economies", 2023, with Philippe Bacchetta and Brendan Berthold, R&R Review of Economic Studies
Foreign exchang interventions entail a net risk-ajusted benefit to small safe haven economies because foreign intermediaries value the safe haven property of the domestic currency than households.
"Short-term Finance, Long-term Effects: Evidence from a Moroccan Credit Guarantee program", 2023, with Omar Chafik, Min Fang and Wenxia Tang
Moroccan firms with guaranteed short-term loans (i) decrease their cash ratio, (ii) persistently expand their production scale, and (iii) their participation in the guarantee program is humped-shaped in firm size. We rationalize these findings in a heterogeneous-firm model with a flat entry cost into the guarantee program, collateral and working capital constraints.
"Do Local Forecasters Have Better Information?", 2023, with Elio Bolliger, R&R Review of Economics and Statistics
Local Forecasters make smaller mistakes than foreign one. This local advantage originates in better information, not in smaller behavioral biases.
"Foreign Currency Debt and Expectations", 2022, with Isabella Blengini and Ouarda Merrouche
We highlight an expectation channel of corporate foreign currency (FC) borrowing. Controlling for fundamentals, we show that poor sovereign ratings predict positive domestic currency excess returns and are associated with more corporate FC borrowing, which suggests that FC borrowing mayreflect an informational advantage of domestic borrowers on domestic fundamentals.
Publications
"News, Sentiments and Capital Flows", with Rachel Cordonier. Journal of International Economics, Volume 137, July 2022. https://doi.org/10.1016/j.jinteco.2022.103621
News shocks (a rise in future domestic TFP) leads to a decrease in gross capital flows (both inflows and outflows), while sentiment shocks (a rise in domestic optimism unrelated to current or future TFP) have the opposite effect. This is consistent with a model where domestic investors have an informational advantage on domestic fundamentals.
"Understanding Swiss Real Interest Rates in a Financially Globalized World", 2022, with Philippe Bacchetta and Jean-Paul Renne, Swiss Journal of Economics and Statistics, 158, 16. See summary in La Vie Economique. https://doi.org/10.1186/s41937-022-00095-3
Switzerland is not a "low real interest rate island" anymore, as real rates in advanced economies have converged, in a context of financial globalization. In the last decade, the Swiss real rate has actually become higher than the German one. We show that this is driven by the a significant increase in expected real depreciation of the Swiss franc and a somewhat lower convenience yield for Swiss bonds.
“Does Demand Noise Matter? Identification and Implications”, 2021, with Céline Poilly, Online appendix, Journal of Monetary Economics, Volume 117, January, Pages 278-295. https://doi.org/10.1016/j.jmoneco.2020.01.006
We use sign restrictions on surveyors' expectation errors on both GDP growth and inflation to identify noise shocks on supply and demand in the US. We find that demand noise is recessionary and contributes substantially to business cycles.
"Money and Capital in a persistent Liquidity Trap", 2020, with Philippe Bacchetta and Yannick Kalantzis, Technical appendix, Journal of Monetary Economics, Volume 116, December, Pages 70-87. https://doi.org/10.1016/j.jmoneco.2019.09.005
A large and persistent deleveraging shock leads to a persistent liquidity trap, with an increase in cash holdings and a long-term decline in investment.
"Optimal Monetary Policy when Information is Market-Generated", 2019, with Isabella Blengini, Economic Journal, Online appendix
When price-setters learn about real shocks from their local market, price stabilization is not optimal. On the contrary, it becomes optimal to emphasize the price response to real shocks, to make market variables more informative.
"Booms and Busts with Dispersed Information", 2019, Technical Appendix, Journal of Monetary Economics
When information is dispersed and firms learn from their economic outcomes, aggregate errors about demand trigger expectation-driven boom-and-bust episodes.
"Corporate cash and Employment", 2018, with Philippe Bacchetta and Céline Poilly, Data Appendix, Vox column, American Economic Journal: Macroeconomics
This framework sheds a new light on the impact of financial shocks by distinguishing between liquidity and credit shocks. Liquidity shocks appear to be crucial to explain the negative relationship between cash and employment.
"The Demand for Liquid Assets, Corporate Saving, and International Capital Flows", 2015, with Philippe Bacchetta, Technical Appendix, Journal of the European Economic Association, vol. 13, Issue 6, pages 1101-1135, Pdf
Credit constraints and working capital generate a complementarity between capital and the corporate demand for liquidity. It is consistent with the surge of capital outflows in Emerging Asia.
"Optimal Exchange Rate Policy in a Growing Semi-Open Economy", 2014, with Philippe Bacchetta and Yannick Kalantzis, IMF Economic Review, vol. 62, pages 48-76, Pdf, Vox Column
Our main result is that in a growth acceleration episode it is optimal to have an initial real depreciation of the currency combined with an accumulation of reserves.
"Safety traps", 2013, with Baptiste Massenot, American Economic Journal: Macroeconomics, vol. 5(4), pages 68-106. Pdf. This paper received the "Young Economist Award 2012" from the Swiss Society of Economics and Statistics.
A safety trap is an equilibrium with high risk aversion, that generates a negative comovement between wealth and risky capital. It is consistent with Japan's lost decade.
"A Reappraisal of the Allocation Puzzle through the Portfolio approach", 2013, Journal of International Economics, vol. 89(2), pages 331-346, Pdf.
Investment risk can explain the allocation of capital flows across developing countries.
"Capital Controls with International Reserve Accumulation: Can this Be Optimal?", 2013, with Philippe Bacchetta and Yannick Kalantzis, American Economic Journal: Macroeconomics, vol. 5(3), pages 229-62. Pdf
We show that in a constrained country with sustained growth it is optimal for the central bank to overaccumulate foreign reserves.
"Financial Integration, Capital Misallocation and Global Imbalances", 2013, Journal of International Money and Finance, volume 32, pages 324-340.
Financial integration between an Industrial and an Emerging country with limited enforcement generates current account surpluses and increased TFP in the latter.
"Exchange Rate Volatility and Productivity Growth: The Role of Liability Dollarization", 2011, Open Economies Review, Technical Appendix
This paper studies theoretically and empirically how liability dollarization conditions the effect of exchange rate flexibility on growth.
"When Do Long-term Imbalances Lead to Current Account Reversals?", 2010, with Olena Havrylchyk, World Economy
Taking into account the deviation of net foreign assets from their long-run equilibrium level helps to explain better the occurence of current account reversals.
"Déséquilibres Globaux et Croissance des Pays Emergents dans une Economie Mondiale", 2009, La Revue Economique
"Déficits courants des PECO : comment évaluer les risques de retournement ?", 2006, with Olena Havrylchyk, La Lettre du CEPII N°262
Book Chapters
"Corporate Saving in Global Rebalancing", 2013, with Philippe Bacchetta, forthcoming in Global Liquidity, Spillovers to Emerging Markets and Policy Responses, edited by Jaume Ventura, Diego Saravia and Claudio Raddatz, published by Central Bank of Chile. Vox column
We examine how corporate saving contributes to global rebalancing. A credit crunch and a growth slowdown in developed countries implies a reduction in global imbalances and a growth slowdown in emerging countries.
Conferences
Small Business, Development and Growth, Rabat (Morocco), October 3-4 2022