Publications
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We propose a new methodology to revise the international poverty line (IPL) after Ravallion et al. (2009) using the same database, but augmented with new variables to take into account social inclusion in the definition of poverty along the lines of Atkinson and Bourguignon (2001). We provide an estimation of the world income distribution and of the corresponding number of poor people in the developing world. Our revised IPL is based on an augmented two‐regime model estimated using a Bayesian approach, which allows us to take into account uncertainty when defining the reference group of countries where the IPL applies. The influence of weighting by population is discussed, as well as the IPL revision proposed in Deaton (2010). We also discuss the impact of using the new 2011 PPP and the recent IPL revision made by the World Bank.
Depuis au moins deux décennies, les économies des pays industrialisés connaissent une décélération tendancielle de l’inflation ainsi qu’un écrasement des cycles de l’inflation. Ces phénomènes sont le résultat de plusieurs facteurs d’ordre structurel.Le premier est l’atténuation des déterminants nationaux de l’inflation. Elle se traduit par une moindre réactivité de l’inflation aux tensions du marché...
This paper proposes a Bayesian non-parametric mortality model for a small population, when a benchmark mortality table is also available and serves as part of the prior information. In particular, we extend the Poisson-gamma model of Hardy and Panjer to incorporate correlated and age-specific mortality coefficients. These coefficients, which measure the difference in mortality levels between the small and the benchmark population, follow an age-indexed autoregressive gamma process, and can be stochastically extrapolated to ages where the small population has no historical exposure. Our model substantially improves the computation efficiency of existing two-population Bayesian mortality models by allowing for closed form posterior mean and variance of the future number of deaths, and an efficient sampling algorithm for the entire posterior distribution. We illustrate the proposed model with a life insurance portfolio from a French insurance company.
We propose some new stylized facts on Vietnamese exporters that emphasize firm heterogeneity in trade regimes and firm ownership. We show first that the distribution of firms' export intensities is U-shaped with more than half of Vietnamese exporters exporting more than 50% of their output. This contrasts with the export patterns in industrialized countries but is similar to the export intensity distribution for other emerging economies with strong participation in global value chains. Second, we show that export premia, evaluated in terms of both productivity and wage indexes, are positive only for Vietnamese exporters involved primarily in ordinary trade, and that processing exporters exhibit lower productivity indexes and pay lower wages than their non-exporting counterparts. This pattern is more pronounced among the group of foreign-owned firms in Vietnam compared to the group of domestic firms and is in line with previous findings for China.
This paper proposes some simple models where the central bank trades off between stabilizing the business cycle and targeting inflation to a level that stabilizes the public debt ratio. We show that in a closed economy fiscal dominance does not necessarily imply hyperinflation. Moreover, in an open economy it is successful in lowering debt ratios when output is reactive enough to unconventional monetary policy and when the expectations of future inflation are well anchored to the debt-stabilization inflation target. We show that the dynamics of both inflation and public debt ratio are described by first-difference equations with time varying coefficients. We provide some conditions for the asymptotic solutions of the long-run steady states. In particular, we define two regimes of respectively strong and weak fiscal dominance, depending upon whether or not the central bank's action ensures both the sustainability and the speed of convergence of debt to its long-term level.
We consider a one-dimensional model of electoral competition with national and regional parties. There are two regions and three parties—one national party and one regional party for each region. We divide the paper into two parts—homogeneous and heterogeneous regions. In the former, the policy positions of the national party and the regional party of the region with the greater number of constituencies coincide with the favorite policy position of the region-wide median voter. In the latter, the national party chooses a policy position in a maximal isolation set, while the two regional parties choose policies on the same side of the national party’s policy as their own respective region-wide medians. For a given outcome function, the national party performs better when the regions are heterogeneous. In the homogeneous regions case, the national party can at best do as well as the regional party of the region with the greater number of constituencies. Our results are broadly consistent with intuition and evidence.
Macroprudential policies, such as caps on loan-to-value (LTV) ratios, have become part of the policy paradigm in emerging markets and advanced countries alike. Given that housing is the most important asset in household portfolios, relaxing or tightening access to mortgages may affect the distribution of household wealth in the country. In a stylised model we show that the final level of wealth inequality depends on the size of the LTV ratio, housing prices, credit cost and the strength of a bequest motive, and therefore it is not possible to predict an unequivocal effect of LTV ratios on wealth inequality. These trade-offs are illustrated with estimations of “Gini Recentered Influence Function” regressions on household survey data from 12 Euro-zone countries that participated in the first wave of the Household Finance and Consumption Survey. The results show that, among the households with active mortgages, high LTV ratios at the time of acquisition are related to high contributions to wealth inequality today, while house price increases are negatively related to inequality contributions. A proxy for the strength of bequest motives tends to be negatively related with wealth inequality, but credit cost does not show a significant link to the distribution of wealth.
In their efforts to affect regulations, firms have developed specific strategies to exploit scientific uncertainty. They have manufactured doubt by hiring and funding dissenting scientists, by producing and publicizing favorable scientific findings and by generally concealing their involvement in biased research. We propose a new model to study the interplay between scientific uncertainty, firms' miscommunication and public policies. The government is benevolent but populist, and maximizes social welfare as perceived by citizens. The industry can produce costly reports showing that its activity is not harmful. Citizens are unaware of the industry's miscommunication. We first characterize the industry's optimal miscommunication policy. The industry notably ceases miscommunicating abruptly when scientists' belief reaches a critical threshold. We identify a natural condition under which miscommunication is stronger under a tax on emissions than under command and control. We then analyze research funding. A populist government may support research to enable firms to falsely reassure citizens. Establishing an independent research agency helps limit the welfare losses induced by populist policies.
