"Multiple Equilibria and Identification" by Russel Cooper : A comment

In his lecture at the Conférence des Annales, Russel W. COOPER raises issues that certainly will become more and more important as models that exhibit multiple equilibria become more and more common in today economic literature. These models are appealing as they may allow econo- mists to cast some light for instance on the mechanisms that govern the large swings in growth pace or on the reasons why similar institutions can lead to different economic situations. Russel made decisive contributions to understand some of these mechanisms. Nevertheless, a concern exists that due to their multiple equilibria, these models might not be falsified. Russel W. COOPER presents various empirical examples to illustrate that during the last ten years progress has been made. It seems possible to draw some empirical knowledge from these estimation exercises. Notwithstanding, complete empirical investigations of these models are rare because their estimating remains difficult and economists have to resort to simplifying assumptions or calibration approach to avoid these difficulties. In this comment, at the risk of distortion, I will try to restate some of Russel W. COOPER’s points focusing on their statistical dimensions and emphasizing that recent progress in econometrics may help to tackle some of these issue

Subsidizing low-skilled jobs in a dual labor market

A large exclusion from the labor market or an important unemployment of low-skilled workers is observed in some developed economies in which a minimum wage has been introduced. In such circumstances, governments may adopt two kinds of policies. They may pay unemployment benefits or they may try to increase demand for low-skilled labor by subsidizing low-skilled jobs. In this paper, we propose a matching model which allows to analyze the effects of these policies on the labor market. In our framework, the government budget is balanced through taxes on occupied workers and classical and frictional unemployment simultaneously exist. The labor market is dual featuring low-skilled and high-skilled workers. Low-skilled jobs pay the minimum wage, while high-skilled wages result from bargaining. Moreover, high-skilled unemployed can apply for both types of jobs thereby accepting to be downgraded, while opportunities for low-skilled workers are limited to low-skilled jobs. We first give conditions for the existence and uniqueness of a steady- state equilibrium and we analyze the effects of several fiscal instruments. In this set-up, increasing low-skilled job subsidies does not necessarily reduce low-skilled unemployment or unemployment spells. We provided empirical evidence by calibrating our model on French labor market data, it is found that for five low-skilled workers leaving classical unemployment, two high-skilled workers are downgraded (although they might have been previously unemployed).Crowding-out, Matching, On-the-job search, Taxation

Competitiveness indices: interpretation and limits

Some competitiveness indices and the rankings of countries according to these indices are widely publicized. We discuss here how they should be interpreted and their empirical robustness, focusing on the indices published by the World Economic Forum (WEF). These indices suffer from several weaknesses. First, their theoretical basis is approximate. Second, they rest on many a priori assumptions regarding growth and competitiveness factors, which may be not empirically founded. Lastly, measurement of these factors is based on questionable indicators. Such weaknesses may lead to fragile indices and rankings. This is confirmed by an empirical analysis of the building of the main index (GCI) published by the WEF. We thus attempt to reproduce WEF's construction, on a more rigorous statistical basis. Starting from the same elementary indicators as the WEF's 2001 GCI index, we aggregate them with weights chosen to maximize the correlation between the aggregate index and GDP per capita growth for the retained countries, which is the supposed aim of the GCI index. The rankings we obtain differ, sometimes considerably, from WEF's rankings, although all the considered indices are similarly correlated with GDP per capita growth. The new indices do not however pretend to replace WEF's ones. They have obviously the same limits in terms of robustness, notably a weak capacity to account precisely for between countries growth discrepancies.

Empowerment zones and the housing market in paris inner city

We test for the impact of local enterprise zones on house prices in inner Paris. In 1997, a new urban policy program was launched in France which created three kinds of Enterprise Zones (ZUS, ZRU and ZFU). Notably, 9 first tier EZs (ZUS) were created in Paris. We use this natural experiment and compare the evolution of flat prices in these areas to that in a control group of neighboring areas (that could also have been converted into ZUS). We develop a new semi-parametric spatial matching methodology. Each sale observed be-fore the reform is matched with a similar post-reform counterfactual. This matching procedure is done for housing units within the EZ, as well as for units in the vicinity of the EZ. In contrast to what have been evidenced in other ad-ministrative districts of the Paris Region and for other kinds of EZs (i.e., ZFUs), we detect no significant effect of this expensive EZ program implementation on housing values

Parasite escape through trophic specialization in a species flock

Submitted version (preprint).submittedVersio

Demographic changes and economic growth: a macroeconomic projection for 2020

Exploring the economic consequences of demographic changes is often carried out within simple accounting frameworks. Such approaches consist of projecting the impact of ageing on social security expenditures under exogenous assumptions about economic growth, productivity, wages and employment. Alternative attempts to consider richer interactions between economic and demographic variables are carried out with calibrated computable general equilibrium models with overlapping generations. These models are basically neoclassical. Up to now in France, this question seldom has been examined with macroeconometric models of keynesian inspiration. Studying the results provided by such models for France may therefore be of interest. This is the purpose of this work, which presents an economic outlook for 2020 carried out with MESANGE macroeconometric model. This model has short term keynesian and long term neo-classical properties. This exercise integrates the impact of demographic changes on savings, consumption, social expenditures and disequilibrium on the labour market. Labour force projections and the natural dynamics of the model lead to employment levels that remain insufficient to ensure balance in social accounts. Additional taxes would therefore be required. Two possibilities are explored: the CSG or Generalized Social Contribution (a constant tax rate on capital and labor income) or employers and employees social contributions (with or without an impact of employees contributions on the fiscal wedge). The model predicts that the level of employment is less penalised by the former modality. We also explore the consequences of tougher conditions to get full pensions which, at the 2020 horizon, would lead to a one-year increase of the age of new retirees. In this case, the increase of the CSG that would be required to meet Maastricht criteria amounts to 4.3 points. Choosing between CSG and social contributions might nevertheless depend on other considerations, such as their incidence on the relative standards of living of workers and pensioners, or the wish to keep a strong correspondence between pension benefits and contributions paid during working life.retirement, ageing, growth, sustainability of public spending

On the Behaviour of Phillips-Perron Tests in the Presence of Persistent Cycles

In this paper, we analyse the impact of persistent cycles on the well-known semi-parametric unit root tests of Phillips and Perron (1988, Biometrika, Vol. 75, pp. 335-346). It is shown, both analytically and through Monte Carlo simulations, that the presence of complex (near) unit roots can severely bias the size properties of these tests. Given the popularity of these tests with applied researchers and their routine presence in most econometric software packages, the results presented in this paper suggest that practitioners should treat the outcomes of these tests with some caution when applied to data which display a strong cyclical component

Role of radiosynovectomy in the treatment of rheumatoid arthritis and hemophilic arthropathies

Radiosynovectomy is a novel method of treatment for several acute and chronic inflammatory joint disorders. A small amount of a beta-emitting radionuclide is injected into the affected joint delivering a radiation dose of 70 to 100 Gy to the synovia. The proliferative tissue is destroyed, secretion of fluid and accumulation of inflammation causing cellular compounds stops and the joint surfaces become fibrosed, providing long term symptom relief. The radionuclides are injected in colloidal form so that they remain in the synovium and are not transported by lymphatic vessels causing radiation exposure to other organs. Complete reduction of knee joint swelling has been seen in above 40% and pain relief in 88% of patients. Wrist, elbow, shoulder, ankle and hip joints showed significant improvement in 50-60% and restoration of normal function and long term pain relief has been achieved in about 70% of small finger joints. In hemophilic arthropathies complete cessation of bleeding in about 60% and improved mobility in 75% of patients has been reported