Publications
Articles in Peer-Reviewed Journals
"Macroepidemics and unconventional monetary policy", with Olivier Damette and David Shanafelt, Economic Modelling, Volume 126, Septembre 2023, Pages 106-431 (Paper) (Appendix) (Codes)
Abstract
Although the current COVID-19 pandemic was neither the first nor the last disease to threaten a pandemic, only recently have studies incorporated epidemiology into macroeconomic theory. This paper uses a dynamic stochastic general equilibrium (DSGE) model with a financial sector to study the economic impacts of epidemics and the potential for unconventional monetary policy to remedy those effects. By coupling a macroeconomic model with a traditional epidemiological model, we can evaluate the pathways by which an epidemic affects a national economy. We find that no unconventional monetary policy can completely remove the negative effects of an epidemic crisis, save perhaps an exogenous increase in the shares of claims coming from the Central Bank "epi loans". To the best of our knowledge, our paper is one of the first to incorporate disease dynamics into a DSGE-SIR model with a financial sector and examine the use of an unconventional monetary policy.
"The Effects of Oil Price Shocks in a New-Keynesian Framework with Capital Accumulation" with Gaël Giraud, Florent McIsaac and Ngoc-Sang Pham, Energy Policy, Volume 86, November 2015, Pages 844 – 854. (Appendix) (Working Paper)
Abstract
The economic implications of oil price shocks have been extensively studied since the 1970s. Despite this huge literature, no dynamic stochastic general equilibrium model was available that captures two well- known stylized facts: (1) the stagflationary impact of an oil price shock, together with (2) the influence of the energy efficiency of capital on the depth and length of this impact. We build, estimate and simulate a New-Keynesian model with capital accumulation, which takes the case of an economy where oil is imported from abroad, and where these stylized facts can be accounted for. Moreover, the Bayesian estimation of the model on the US economy (1984–2007) suggests that the output elasticity of oil might have been above 10%, stressing the role of oil use in US growth at this time. Finally, our simulations confirm that an increase in energy efficiency significantly attenuates the effects of an oil shock—a pos- sible explanation of why the third oil shock (1999–2008) did not have the same macro-economic impact as the first two ones. These results suggest that oil consumption and energy efficiency have been two major engines for US growth in the last three decades.
Working Papers
"Pollution, Endogenous Capital Depreciation, and Growth Dynamics", with David Desmarchelier and Romain Restout, Working Paper BETA #2024-01, January 2024 (Submitted)
Abstract
This paper documents a positive and significant relationship between carbon dioxide emissions and capital depreciation rate for a large sample covering more than 80 countries over recent decades. Using this result, we develop a simple Solow model with an AK production function in which a pollution externality, viewed as a stock, increases the capital depreciation rate. In the long run, it appears that whatever the magnitude of the pollution effect on capital depreciation, there is no room for endogenous growth, despite the AK technology. Moreover, we observe that a sufficiently sensitive capital depreciation rate to pollution can lead to the emergence of a limit cycle near the steady state of the economy (Hopf bifurcation), indicating that the relationship empirically documented within this paper acts as a destabilizing force for the economy.
"Macroepidemics and unconventional monetary policy: Coupling macroeconomics andepidemiology in a financial DSGE-SIR framework", with Olivier Damette and David Shanafelt, CEPR Covid Economics , Issue 67, February 2021 (Appendix)
Abstract
Despite the fact that the current covid-19 pandemic was neither the first nor the last disease to threaten a pandemic, only recently have studies incorporated epidemiology into macroeconomic theory. In our paper, we use a dynamic stochastic general equilibrium (DSGE) model with a financial sector to study the economic impacts of epidemics and the potential for unconventional monetary policy to remedy those effects. By coupling a macroeconomic model to a traditional epidemiological model, we are able to evaluate the pathways by which an epidemic affects a national economy. We find that no unconventional monetary policy can completely remove the negative effects of an epidemic crisis, save perhaps an exogenous increase in the shares of claims coming from the Central Bank (“epi loans”). To the best of our knowledge, our paper is the first to incorporate disease dynamics into a DSGE-SIR model with a financial sector and examine the effects of unconventional monetary policy.
"What if Oil was Less Substitutable?", Working Paper BETA #2020-08 , 2020 (Updated version 2020)
Abstract
The consequences of oil price shocks in the real economy have preoccupied economists since the 1970s and the absence of a reaction has stunned them in the 2000s. However, despite the huge literature devoted to the subject, no Dynamic Stochastic General Equilibrium (DSGE) model has captured, all at the same time, four of the stylized effects observed after the oil price increase of the 2000s: the absence of a contemporaneous recession, coupled with a low increase in the inflation rate, a decrease in real wages and low price elasticity of oil demand in the short run. One of the reasons for this is that theoretical papers assume a high degree of substitutability between oil and other factors (capital and labor in production, other goods in consumption), an assumption that is not backed-up empirically. This paper introduces imperfect substitutability between oil and other factors and estimates the model parameters using empirical data from 1984:Q1 to 2007:Q3. The results of the Bayesian estimation suggests that the elasticities of substitution of oil are 0.086 in production and 0.014 in consumption. Furthermore, a sensitivity analysis of the estimated model points towards two main policy conclusions: (a) a stronger anti-inflationary Taylor rule can lead to a recession after an oil shock and; (b) wage flexibility could create a stronger increase in inflation and provoke a decrease in domestic consumption.
"Oil and Unemployment in a New-Keynesian Model", Centre d’économie de la Sorbonne 2015.43, 2015
Abstract
The effects of oil shocks in inflation and growth have been widely discussed in the literature, however few have focused on the impact of oil price increases on unemploy- ment. In order to shed some light on this problem, this paper develops a medium scale Dynamic Stochastic General Equilibrium model (dsge) that allows for oil utilization in production and consumption as in Acurio-Vásconez (2015); unemployment as in Mortensen & Pissarides (1994); and staggered nominal wage contracting as in Gertler & Trigari (2009). It then analyzes the effects of oil price increases on the economy. The model recovers most of the well-known stylized facts observed after the oil shock in the 2000s’. A sensitivity analysis shows that the reduction of the bargaining power of households to negotiate wage contracts reduces the impact of an oil shock in unem- ployment, without affecting negatively gdp. However, it also shows that the reduction of bargaining power, together with wage flexibility strongly reduces the increase in unemployment after an oil shock, but causes a decrease in real wages, which reduces household income and affects GDP.
Work in Progress:
"Green Bonds and The Energy Transition: Efficiency and Social Inequalities"
"Unraveling the Interplay of Substitution Elasticities and the Green Energy Rebound Effect"
"Oil Dependence and Oil Shocks Impacts: Europe vs United States "
"The Effects of the Energy Transition on Unemployment"
"A DSGE Model for a Energy Producer Country"
"Could Structural Change Explain the Dynamics of Worked Hours?"