- Inflation and Inequality in France, the US and the UK (1789-2017). Testing an Overlapping Generations Model (with Marion Labouré, Harvard)
Abstract : This paper aims at determining the impact of inflation on income (in)equality. Using the shopping-time approach, we find that inflation does influence income inequality. The higher the inflation rate is, the more unequal a society is. We illustrate our finding with historical time series of three bigmain economies, namely the United States, the United Kingdom, and France, covering the period 1900- through 2016, with episodes of high inflation and deflation.
- Corporate Debt and Productivity in Europe. Theory, History, Policy.
Abstract : This research aims at assessing the evolution, determinants and consequences of the indebtedness of banks and companies in the eurozone for the past 20 years. We aim at measuring the acuteness of private debt crises in vulnerable countries and sectors, mapping private debt liabilities across companies and banks on a European scale, and identifying the respective roles of inequalities and financial development in the evolution of private debt. As a second step, we propose policy responses to excessive corporate leverage and institutional recommendations. This work is based on an empirical analysis of the Amadeus, Bankscope and ECB Country surveillance's datasets, encompassing more than fifty variables for all European banks and over 3 million companies, as well as more than fifty macroeconomic variables. My particular focus was the policy and institutional responses to European financial imbalances.
Abstract : Quantitative protectionism, more precisely import substituting industrialization through quantitative trade restrictions, has been one of the most popular development policies of the 20th century. The researches led around Anne Krueger, based on scarce data from Third World countries, concluded on its overall inefficiency, caused by rising macroeconomic costs and rent capture. One of the most ambitious implementations of import substitution, French oil protectionism created detailed archival data which allow to quantify its costs and gains for more than half of the 20th century. Contratry to Krueger's findings in Third World countries, we show that the yearly macroeconomic cost of the policy, an average of 3% of GDP, remained under control and gradually decreased from the 1960s. Detailed biases of quota allocations show that rent seeking linked to big companies and dominant geographical places remained limited. We show how the shifts in trade protection linked to the weight of social-administrative groups in quota juries brought the biggest imbalances to the system. After the discovery of oil in Algeria, social-administrative rent seeking increased the political instability of the Fourth Republic and peaked as soon as the end of the 1950s. Hence, in the case of French oil, quantitative protectionism was macroeconomically efficient in the long run, but created medium term political instability.
Abstract : The history of French foreign exchange control has been presented as the succession of four stages. During the interwar, a memorial historiography underlined the positive role of liberal Chambers of commerce, and the negative role of oil cartels. During the Second World War and immediate after-war, foreign exchange control would have been centralized as a State policy. The 1950’s would have seen two elite groups, from the French National School of Administration and the Mines School, fight for the control of this policy. The 1960’s would have seen the pressure of US-backed international organizations leading to a reorganization of the system based on the objectives of efficiency and rent-management. This paper proposes a new narrative based on new historiographical, archival and empirical evidence. It underlines the continuity between cartels and State regulations during the interwar, the dissolution of the system amidst particular interests during and immediately after the war, and the central role of the rivalry between French and anglo-saxon big companies during the 1950’s. It challenges the idea of an end of the system, during the 1960’s, caused by rising inefficiencies. On the contrary, its achievements led to a reorganization, maintaining its core features till today. The end of its quantitative impacts didn’t mean its institution of negotiations and information lost their central role in matters of economic policy.
- Linking local business with global growth opportunities: the role of infrastructure (European Investment bank, Oxford Review of Economic Policy. )
Abstract : Infrastructure is instrumental when it comes to linking local businesses with their global growth opportunities. This paper shows that, by making this link, the transport network can act as a catalyst for regional economic growth. Using a novel approach, we find that firms in regions with a more developed transport infrastructure are better placed to benefit from positive growth opportunities than those in regions with a less well-developed transport network. This advantage is most pronounced in times of economic slack—making a better transport network a key ingredient for economic recovery. It is against this background that the recent slowdown in infrastructure investment in Europe is worrisome. But it is through this channel (among others) that the substantial ramp-up of activity by the European Investment Bank is expected to foster growth and enhance competitiveness in Europe.
Abstract : Infrastructure investment has been adversely affected by the economic crisis, undermining both the immediate recovery and longer term growth potential. This paper discusses recent trends in infrastructure investment and finance in Europe, before exploring one way in which transport infrastructure - the sector that has been arguably hardest hit by the crisis - contributes to regional growth. Using a novel approach, we show that firms in regions with a more developed transport network are better placed to benefit from positive growth opportunities than firms in regions with a lower transport stock. This advantage is more pronounced in times of economic stress - making a good transport infrastructure a key economic ingredient for economic recovery. This indicates one channel through which the activities of the European Investment Bank, now extended through the Investment Plan for Europe, can be expected to foster growth and enhance competitiveness in Europe.
- The Rise and Fall of the Dollar, or When did the Dollar replace the Sterling as the leading international currency ? (Barry Eichengreen, Marc Flandreau)
Abstract : We present new evidence on the currency composition of foreign exchange reserves in the 1920s and 1930s. Contrary to the presumption that the pound sterling continued to dominate the U.S. dollar in central bank reserves until after World War II, we show that the dollar first overtook sterling in the mid-1920s. This suggests that the network effects thought to lend inertia to international currency status and to create incumbency advantages for the dominant international currency do not apply in the reserve currency domain. Our new evidence is similarly incompatible with the notion that there is only room in the market for one dominant reserve currency at a point in time. Our findings have important implications for our understanding of interwar monetary history but also for the prospects of the dollar and the euro as reserve currencies.
- Was the Emergence of the International Gold Standard Expected ? Melodramatic Evidence from Indian Government Securities (Marc Flandreau, Kim Oosterlinck)
Abstract : The emergence of the gold standard has for a long time been viewed as inevitable. Fluctuations of the gold-silver exchange rate in world markets were accused to lead to brutal and unsustainable switches of bimetallic countries’ money supplies. However, more recent work has shown that the option character of bimetallism provided a stabilizing feedback loop. Using original data, this paper provides support to the new view. Using quotation prices for Indian Government bonds, we analyze agents’ expectations between 1860 and 1890. The intuition is that the spread between gold and silver bonds issued by the same entity (India) and backed by a credible agent (Britain) is a “pure” measure of the silver risk. The analysis shows that up until 1874 markets were expecting bimetallism to last. It is only after this date that markets gradually started requiring a premium to hold silver bonds indicating their belief that gold would eventually become the only metallic standard.
Abstract : This paper, basing itself on a thorough quantitative study of French international oil transactions from the 1920s to the 1970s, provides a new interpretation of the role of oil in French economic development during the period. In particular, it emphasizes the way oil regulations shaped an economic and political development path. This path, although linked to macroeconomic growth, created high unstability in the oil sector in the large sense of it, and beyond, to the foreign economic policy, especially in the context of the Algerian Independance War.
- The international transactions of France from the 1920's to the 1970's
Abstract (in English)
Full text (in English)
Full text (in French)
Abstract : This PhD thesis deals with external economic policies, and focuses on quantitative restrictions of trade and financial flows. It re-assesses the efficiency of one of the mostly used development policy of the 20th century, import substitution industrialization through quantitative restrictions of commercial flows. A case-study of France, and especially of its first trade post, oil products, leads to a critic of the classic Anne Krueger and Jagdish Bagwhati argument about the inefficiency of this policy. Its problem was not the industrialization rent, which tended to diminish over time, nor rent capture, which remained low compared to the general gains allowed by this policy. Its problem was, rather, the endogenous imbalance of rent capture decomposition between agents of the system and the political risks it fostered.This thesis also provides a new narrative of French foreign exchange control. It underlines the continuity between cartels and State regulations for the interwar, the dissolution of the system amidst particular interests during and immediately after the war, and the central role of the rivalry between French and anglo-saxon big companies during the 1950’s. It challenges the idea of an end of the system, during the 1960’s, caused by rising inefficiencies. On the contrary, its achievements led to a reorganization, maintaining its core features till today.