As the Eurozone crisis lingers on, euro exit is now being debated in ‘core’ as well as ‘periphery’ countries. This column examines the potential costs of euro exit, using France as an example. The authors estimate that 30% of private marketable debt would be redenominated, but since only 36% of revenues would be redenominated, the aggregate currency mismatch is relatively modest. However, the immediate financial cost of exiting the euro would nevertheless be substantial if public authorities were to bail out systemic and highly exposed companies.
David Amiel, Paul-Adrien Hyppolite, Sunday, March 15, 2015
Reka Juhasz, Thursday, January 15, 2015
The effect of trade protection of infant industries in developing countries on their long-term growth has been widely debated. This column provides evidence on this topic using a novel dataset from the Napoleonic blockade against British trade. The author analyses the effect of this temporary trade protection on the cotton spinning as an infant industry, employing within-country variation in the trade protection. In the short run, better protected regions increased their production capacity in the infant industry. There is a persistence of this productivity in the long run as well.
Eric Monnet, Saturday, July 5, 2014
The Global Crisis has raised the interest of banks in using quantitative controls, such as credit controls. This column discusses a relatively recent historical episode of credit controls in France. During this episode the role of interest rates was almost eliminated. Quantitative controls effectively decreased output and prices in the short-run. The difficulty for the Central Bank stemmed from the fact that it had to change its instruments constantly. This historical episode demonstrates that macroprudential tools can have substantial effects on monetary policy.
Guy Michaels, Ferdinand Rauch, Sunday, December 8, 2013
The world is urbanising quickly but many cities are poorly located. Such misplacement is associated with bad access to the world markets and frequent natural disasters. This column explores historical evidence of French and English towns during the Roman Empire and in the Middle Ages. Path-dependency in the city locations explains the difference in their development and suggests relevant policymaking lessons.
Julien Martin, Florian Mayneris, Wednesday, December 4, 2013
While quality upgrading is always viewed positively in both policy and academic circles, little is known about the macro implications for countries of specialising in high-end varieties. This column presents evidence that high-end variety exporters are less sensitive to trade costs. This implies a greater geographic diversification of exports, which compensates for their higher sensitivity to demand shocks and smoothes aggregate volatility. It also increases export growth when business opportunities arise in distant markets.
Balázs Égert, Rafał Kierzenkowski, Wednesday, October 2, 2013
Decreasing world market share in exports threatens France’s recovery. Traditional determinants of exports do not fully explain the downturn. This paper presents a novel explanation for France’s declining exports: the real-estate boom. Strong profitability in the construction industry, led by rising house prices, diverted capital and labour from export-intensive industries. These results suggest a strong warning against policies supporting property ownership as an end in itself.
Laurent Gobillon, Peter Rupert, Étienne Wasmer, Tuesday, July 23, 2013
The unemployment rate in France is roughly six percentage points higher for African immigrants than for natives. Why? This column argues that the explanation is spatial: recent immigrants tend to have much longer commute times. Research suggests that in the region of 20% of the employment gap between the French minority and the French majority can be put down to commute times, but more research is needed, especially in France where research into the ethnic unemployment gap is scarce.
Clément Bosquet, Pierre-Philippe Combes, Friday, June 21, 2013
Every academic has an opinion about what makes a good department. This column brings evidence from French economics departments. It suggests that larger departments are associated with slightly more but no better publications per academic. And while diversity in terms of researcher quality lowers average publication quality, diversity in research topics increases it.
Luis Garicano, John Van Reenen, Thursday, May 30, 2013
France has a raft of labour-market regulations that kick in for firms with 50 workers or more. This column uses this threshold to identify the economic effects of size-contingent regulations. Such policies seem to subsidise small firms at the expense of larger firms. But since small firms are on average less productive than large firms, the French economy loses out.
Balázs Égert, Friday, May 10, 2013
France has recorded one of the lowest real per capita income growth levels in the OECD over the last 20 years or so. One of the many structural weaknesses causing this weak performance is the French tax system. This column argues that complexity, instability and non-neutrality coupled with very high effective tax rates in many areas of the French tax system put a heavy burden on the economy.
Orley Ashenfelter, Olivier Gergaud, Victor Ginsburgh, Karl Storchmann, Friday, March 1, 2013
Does terroir really affect a wine’s quality? This column argues that alleged experts repeatedly cannot tell a superstar wine from a cheaper bottle. Like many cultural commodities, it seems that the quality of wine is not an objective trait. Rather, these commodities become whatever we want them to become.
Hylke Vandenbussche, Jozef Konings, Wednesday, January 30, 2013
The rise of international production sharing – ‘global value chains’ – has transformed international commerce and pushed economists into new territory. This column argues that there is evidence to suggest that old-fashioned protection can have an unexpected negative effect on firms that are part of a global value chain. In an increasingly globalised world, exporters’ success seems to positively depend on the free entry of imports rather than the other way round.
Thierry Mayer, Florian Mayneris, Loriane Py, Friday, September 28, 2012
Since the 1980s governments in the US, UK and France have been implementing ‘enterprise zones’ to tackle inequalities within cities. This column examines the latest French experiment in the 2000s. It suggests that the zones were largely successful in attracting small firms, but that this was mostly due to opportunistic relocation within municipalities.
Charles A.E. Goodhart, Thursday, February 2, 2012
Inflation in the UK is now more than double that of France, but only one country has had its credit rating downgraded. This column argues that government credit ratings should be aided by a second rating measuring the potential loss of real value, whether by inflation or default.
Avraham Ebenstein, Moshe Hazan, Avi Simhon, Friday, December 2, 2011
For years, policymakers trying to influence the decisions of would-be parents have tried to change the ‘price’ of having children. In France they have made it cheaper; in China more expensive. This column looks at whether such policies are likely to have their desired effect. It examines unique evidence of a shock to the cost of having a child in Israeli communities between 1990 and 2000.
Timothy J Hatton, Monday, May 2, 2011
The recent surge of refugees entering Europe from North Africa – particularly through Lampedusa – has caused a rift among EU states over what should be done and who should shoulder the responsibility. This column asks what theory and recent history can tell us about sharing the refugee burden in the EU.
Tito Boeri, Friday, April 29, 2011
Lampedusa is a small Italian island close to Tunisia. A recent influx of migrants has prompted Messrs Berlusconi and Sarkozy to call for a temporary suspension of the free mobility from countries receiving large waves of refugees and illegal migrants. This column argues that such a step would be madness. The EU needs more mobility, not less.
Julien Martin, Isabelle Méjean, Friday, March 11, 2011
With exports from low-wage countries like China on the rise, the question of what this means for trade and jobs in developed countries is a furious war of words. This column, using firm-level data for France between 1995 and 2005, shows that competition from low-wage markets actually boosts the sales of high-quality goods – but it concedes the benefits are not universal.
Edoardo Campanella, Sunday, February 20, 2011
At the February 2011 European Council meeting, Angela Merkel and Nicolas Sarkozy called on their Eurozone counterparts to sign up to a new pact for closer economic coordination. This column argues that introducing constitutional fiscal rules across Europe would be an important step towards fiscal sustainability, but that their rigidity should be offset by a more flexible economic design.
Pierre Cahuc, Stéphane Carcillo, Wednesday, February 2, 2011
In October 2007 France introduced an exemption on income tax and social security contributions for overtime work. In the second of two columns on the labour market, the authors show that this reform has had no significant impact on hours worked and that it induced workers and employers to manipulate the overtime hours they declare in order to optimise their tax situation.