Research
"Explaining Germany’s Current Account Surplus: Competitiveness or Demand shocks ?", with François Geerolf (UCLA, CEPII)
WP version coming soon (2021)
German industrial success has led many European countries to emulate its model and increase competitiveness, especially through fiscal devaluations and wage moderation. We show in contrast to this common narrative that Germany’s current account surplus more likely results from Germany having depressed its internal demand considerably, both through fiscal policy depressing the average propensity to consume, as well as through pension reforms that have also raised the incentives to save, and depressed retirees’ consumption. This policy would have been much more painful if German’s economic partners did not boost their domestic demand in parallel We propose scenarios for a rebalancing of demand: According to our estimates, a permanent reduction in VAT of 3 points in Germany, accompanied by an increase in social spending of 1 point of GDP, would be sufficient to bring the German current account back to its equilibrium value calculated by the IMF (2.5% of GDP).
"Sectoral Reallocations, Real Estate Shocks and Productivity Divergence in Europe", with Jérôme Héricourt (Univ. Lille, CEPII) and Fabien Tripier (Univ. Dauphine, CEPII)
Working paper version. New version coming soon (2021)
This paper investigates the role of sectoral reallocations in the divergence of productivity in Europe, based on a database for 33 sectors and 14 countries between 1995 and 2015. Using the contribution of sectoral productivity growth to Total Factor Productivity (TFP) at the country level, we highlight that variations in the relative size of sectors—less productive sectors growing relatively to more productive ones—have been at the origin of variable productivity losses in main European countries. Parallel to this divergence, European countries experienced heterogeneous real estate price dynamics, which took the form, in some economies, of massive boom-bust cycles. We investigate real estate shocks as a potential source of sectoral reallocations through a collateral mechanism. These shocks turn out to be a strong driver of productivity divergence between European countries.
"The Macroeconomic Effects of Lump-Sum Taxes" with François Geerolf (UCLA, CEPII)
2020 Working paper version.
This paper measures tax multipliers using the property tax, which is the closest real-world counterpart to a lump-sum tax. This allows us to test for Ricardian equivalence and to isolate the demand-side component of tax multipliers. For identification, we use more than 100 exogenous property tax changes in advanced economies isolated through the narrative record, as well as structural VAR approaches that include more than 1,000 tax changes. We find, using both types of methods—independently—that tax multipliers are between 2 and 3, in line with a growing consensus in the literature. This contradicts Ricardian equivalence, and questions models that predict large tax multipliers only for distortionary tax changes. The effects are persistent, which implies that aggregate demand shocks can have long-term effects.
"Finance and Growth: From the Business Cycle to the Long Run" with Fabien Tripier
Working paper version. VERSION
This paper proposes a new methodology to assess the long-run relationship between economic and financial growth. By linking long-run growth to the properties of business cycles, this methodology offers a better understanding of the channels through which finance can impact long-term growth. We first define the direct elasticity between financial and economic growth to measure the contemporaneous effect of financial growth. If financial booms make recessions more severe, losses of growth during recessions are low when compared with growth supplements during expansions. Beyond this contemporaneous effect of financial booms, we identify a persistent effect of financial growth detrimental to subsequent cycles, which is referred as a hysteresis phenomenon. Then, financial and economic growth rates are positively correlated only up to a certain threshold of financial activity. In our panel of economies, the average level of financial activity is well above this threshold, implying that the total elasticity between finance and growth is negative in the long run.
"Corporate debt structure and Economic Recoveries" with Urszula Szczerbowicz and Fabien Tripier
Working paper version: download . Published in the European Economic Review.
This paper analyzes the business cycle behavior of the corporate debt structure and its interaction with economic recovery. The debt structure is measured as the share of bonds in the total credit to non-financial corporations for a quarterly panel of twenty-five economies over the period 1989-2013. We first show that the substitution of loans for bonds in recoveries is a regular property of business cycles. Secondly, we provide evidence that economies with high bond share and important bond-loan substitution recover from the recessions faster. The relation between corporate debt structure and the economic recovery is maintained when controls for the developments of financial markets are introduced. A theoretical model is developed to explain this relation as the outcome of financial constraints on bank credit supply.
"Assessing House Price Effects on Unemployment dynamics" with François Geerolf
Working paper version: download
We investigate the causal effect of house price movements on unemployment dynamics. Using a dataset of 34 countries over the last 40 years, we show the large and significant impact of house prices on unemployment fluctuations using property taxes as an instrument for house prices. A 10% (instrumented) appreciation in house prices yields to a 3.4% decrease in the unemployment rate. These results are very robust to the inclusion of the variables commonly used to explain unemployment rate developments. If house prices directly impact employment in construction, job volatility in this sector resulting in large employment fluctuations, they impact also total employment through their effects on non-residential investment and consumption, two determinants of labour demand. Housing booms have a specific effect on employment in the tradable sector as they lead to real exchange rate appreciations that affect manufacturing activity.
Note: a previous version of this paper was entitled "House Price Effects on the Labour Market: a New Dutch Disease?".
"House Prices Drive Current Accounts: Evidence from Property Tax Variations" with François Geerolf
Working paper version: download New version coming soon
We study the causal link between house prices and current accounts. Across time and countries, we fi.nd a very large and signicant impact of house prices on current accounts. In order to rule out endogeneity concerns, we instrument house prices for a panel of countries, using property tax variations. A 10% instrumented appreciation in house prices leads to a deterioration in the current account of 1.7% of GDP. These results are very robust to the inclusion of the determinants of current accounts. Following a house price increase, private savings decrease, through wealth effects rather than consumer-finance based mechanisms, while non-residential investment rises through a relaxation of financing constraints for firms.
"Money Creation in Modern Banking and the Settlement Asset Channel"
Working paper version: download New version coming soon
Modern banking features, characterized notably by the development of private payment arrangements and the globalization of banking, have led to a growing questioning of the role of central banks on the provision of money. Central bank money seems to be challenged by the rise of private substitutes, suggesting a privatization of money. To investigate the consequences of these transformations on money creation, I model the conditions for a privatization of money, i.e. for a coexistence between public and private settlement assets. I show that if banks have a balance-sheet constraint on lending, such a coexistence is not possible as only public money is accepted as a settlement asset in equilibrium. The constraint does not prevent private money creation but restricts the use of private settlement assets to separated markets. The model shows also the existence of a "settlement asset channel" as risk propagation mechanisms and the transmission channels of monetary policy are directly impacted by the settlement assets used in banking systems. A direct application of this channel can be found in international banking, through the use of the dollar as settlement asset in global finance.
"Does Modern Banking lead to Money Privatization?"
Published in International Economics, May 2013
Working paper version: download
Money privatization is seen as one of the main features of modern banking. The development of private payment arrangements and the globalization of banking have indeed led to a growing questioning of central banks' monopoly on the provision of money. This paper analyzes empirically the reality of such a phenomenon and renews the attention on the role of central banks in money creation mechanisms. I adopt a novel approach to determine the weight of private money in modern banking. I first calculate orders of magnitude of the share of transactions made with central bank money in a sample of 15 countries. To investigate the evolution of this variable, I focus on the United States, and I construct new datasets on the total value of transactions in retail and large-value payment systems over the last 40 years. Thanks to this empirical novelty, I get a precise estimate of the share of transactions settled in central bank money (over the total value of transactions) in the US. I then analyze the nature of the assets used for the remaining share of transactions. To do so, I study exhaustively all the arrangements and systems in my sample of countries where settlement potentially involves private money. Empirical evidence questions the existence of a privatization of money and shows the monopoly of central bank money in modern banking.
Publications en français :
Endettement public : problème ou solution ?, avec Isabelle Bensidoun,
The Conversation, 17 octobre 2021. "Pourquoi il ne faut pas s'inquiéter de l'envolée de la dette publique française après la crise du Covid-19", JDD, 18/10/2021.
Comment (di)gérer des dettes publiques élevées ?,
Publié dans L'économie mondiale 2022, La Découverte, Septembre 2021.
Banques centrales : les économistes au défi du malaise démocratique,
Publié sur le Blog du CEPII, le 15/09/2021, et dans Alternatives économiques, 10/09/2021.
L'Europe peut-elle sortir de sa léthargie ?,
Alternatives économiques, 30/04/2021.
Sortir du cercle vicieux du décrochage industriel,
Publié sur le Blog du CEPII, le 10/03/2021. et dans Alternatives économiques, 3 mars 2021.
Dettes publiques : quel est le risque d'une nouvelle crise ?,
Publié sur le Blog du CEPII, le 26/02/2021. et dans Alternatives économiques, 20 janvier 2021.
A Béthune, « le coût cumulé sur dix ans de la fermeture de Bridgestone s’élève au minimum à 228 millions d’euros », avec Axelle Arquié,
Le Monde, 1er décembre 2020.
Rééquilibrage de la zone euro : plus facile avec le bon diagnostic !", avec François Geerolf,
La Lettre du CEPII, n°411, octobre 2020.
Désindustrialisation (accélérée) : le rôle des politiques macroéconomiques, avec François Geerolf,
Publié dans L'économie mondiale 2021, La Découverte, p.41-54, septembre 2020
La France dans la spirale de la désindustrialisation
Le Blog du CEPII, 3 novembre 2020
L'Europe doit cesser son jeu de dupes, avec François Geerolf,
Le Monde, 10 avril 2020.
Une solution "à la japonaise" pour éviter la crise des dettes souveraines,
Le Blog du CEPII, Billet, 28 avril 2020 (publié dans Alternatives économiques, 29 avril 2020)
Les booms immobiliers à l’origine de la divergence de la productivité en Europe, avec Jérôme Héricourt et Fabien Tripier,
Le Blog du CEPII, Billet, 2 décembre 2019
Booms immobiliers, réallocations sectorielles et ralentissement des gains de productivité en Europe, avec Jérôme Héricourt et Fabien Tripier,
La Lettre du CEPII, N°402, septembre 2019
Sectoral Reallocations, Real Estate Shocks and Productivity Divergence in Europe: A Tale of Three Countries, avec Jérôme Héricourt et Fabien Tripier,
CEPII Policy Brief, N°27, mai 2019
Les booms immobiliers à l’origine de la divergence de la productivité en Europe
avec Jérôme Héricourt et Fabien Tripier, Le Blog du CEPII, Billet, 2 décembre 2019
Effets macroéconomiques des politiques fiscales : Keynes, le retour, avec François Geerolf.
In L'économie mondiale 2019, La Découverte, p.53-65, septembre 2018
Structure de la dette des entreprises et reprises économiques : analyse d’un groupe de pays, avec Fabien Tripier et Urszula Szczerbowicz
Publication Banque de France, n°63, Mai 2018.
Augmenter ou réduire les impôts : quels effets sur l'économie ? L'exemple de la taxe foncière, avec François Geerolf
La Lettre du CEPII, n°386, Mars 2018
Le financement obligataire comme facteur de reprise ?, avec Urszula Szczerbowicz, Fabien Tripier
Publication Banque de France, N°. janvier 2018
"Finance, Crises et Croissance", avec Fabien Tripier
Revue d’Économie Financière, N°127, 3e Trimestre, 2017.
Finance et croissance : le court terme aux dépens du long terme ?, avec Fabien Tripier
La Lettre du CEPII, n°364, avril 2016
"La réforme du modèle européen et l'efficacité de la politique monétaire", avec Urszula Szczerbowicz et Fabien Tripier.
Revue Banque, n°790bis, Novembre 2015.
"Financement de l'économie : le modèle européen remis en question", avec Urszula Szczerbowicz et Fabien Tripier.
Publié dans L'économie mondiale 2016, Collection Repères, Septembre 2015.
"Le financement obligataire accélère-t-il les reprises ?", avec Urszula Szczerbowicz et Fabien Tripier.
Lettre du CEPII, n°351, Février 2015.
"Globalisation des cycles immobiliers et déséquilibres financiers"
Publié dans L'économie mondiale 2015, Collection Repères, Septembre 2014.
[Chapitre disponible sur demande].
Présentation pour la conférence L'économie mondiale 2015, 24 septembre 2014.
"D'une crise à l'autre : 30 ans de globalisation des cycles immobiliers"
Lettre du CEPII, Mars 2014.
Article reproduit dans Problèmes économiques, Septembre 2014.
"Les prix de l'immobilier: évolutions de long terme et impacts sur le cycle"
Publié dans L'économie mondiale 2014, Collection Repères, Septembre 2013.
Other publications:
"Démocratisation et corruption"
Participation at the book "Sécularisation et démocratisation dans les sociétés musulmanes" (Semih Vaner, Daniel Heradstveit).
Chapter written with Daniel Heradstveit and Matthew Bonham; "Démocratisation et corruption" (Editions Peter Lang, 2008)
"L'influence des groupes d'intérêts éthniques sur la politique étrangère américaine"
Raisons politiques 2008/1 (n° 29)
Structure de la dette des entreprises et reprises économiques : analyse d’un groupe de pays