Implementing and interpreting indicators of core inflation: the case of France

This paper presents a comparison of alternative indicators of underlying or “core” inflation in the French case. Four broad measures are considered and implemented. The first two are inflation excluding food and energy, and the trimmed inflation indicator. We then implement two methods relying on time-series models: the Dynamic Factor Index and the structural VAR approach.  Each indicator stresses on a particular type of shock on the inflation rate, so that no simple ranking of the measures emerges. Combining the various indicators conveys valuable information for appraising short term inflation developments. As regards theoretical interpretation, no indicator is fully satisfactory, lacking an explicit representation of monetary policy. However, comparing forecast performance with respect to inflation provides some specific support in favor of trimmed mean indicators. First version received: January 2000/Final version received: March 2001     

Indigenous Cosmogony and Andean Architecture in El Alto,Bolivia

This essay applies Bourdieu's analysis of the formation of the ‘scholastic habitus’ in medieval times—elaborated in his 1967 afterword to his French translation of Erwin Panofsky's Gothic Architecture and Scholasticism—to the correspondence between indigenous mental categories and architectural innovation in the Bolivian ‘rebel city’ of El Alto. The principle of homology between mental categories and building layout (rooted in a shared habitus) can be used to interpret one of the most spectacular features of Bolivia's ‘emerging architectures’, known as chalets. The term chalet designates a hybrid structure consisting of a colorful and ornate penthouse and multi‐story dwelling erected on building rooftops. The chalets are architectural forms embedded within an economy of symbolic goods characterized by a ‘dual truth’: they are at once material and symbolic; they perform economic functions while seeking public visibility. The conspicuous lifestyle advertised by the construction of chalets can be understood by reference to the rising social power of the indigenous elites (cholos) dominating the thriving ‘ethnic economy’ of the city. The fraternities of El Alto emerge as the structural equivalent of the scholastic institution that Bourdieu associated with Gothic architecture: they are the site of production of a specific habitus, shared by native urban categories defined by similar residential locations, economic activities and forms of collective organization.     

The (Over)Cost of Capital: Financialization and Nonfinancial Corporations in France (1961–2011)

ABSTRACT

The term ‘financialization’ is often used to describe the major changes that occurred in the macroeconomic regimes of most developed and, to a lesser extent, emerging economies since the beginning of the 1980s. In the present paper, we propose a reappraisal of the notion of the cost of capital and subsequently argue that financialization in France has increased the cost of capital for nonfinancial corporations with new standards of financial profitability. We introduce a measurement for what could be called the over-cost of capital and describe how the evolution of this additional financial burden may explain the slowdown in the pace of capital accumulation, and thus the drop in French macroeconomic performance observed for the past 30 years.     

Institutional changes, wars and stock market risk in an emerging economy: evidence from the Israeli stock exchange, 1945–1960

In an effort to understand the determinants of economic growth in an emerging economy, we analyze the effects of institutional reforms, wars and political events on the risk level of the Israeli stock market between 1945 and 1960. We find that the anticipation of wars did not have any effect but the end of skirmishes actually raised the risk on the stock market. Domestic political instability also increased the stock market risk. Finally we find that most legal reforms did not matter much.

Death-related publicity as informational advertising: evidence from the music industry

The sales of books, DVDs, and music albums frequently increase substantially after the death of an artist. Yet, the mechanism behind this stylized fact remains unclear. In this paper, we examine whether after-death sales increases reflect primarily an affective reaction of existing customers or informative advertising for previously uninformed new customers. In our main study, we use weekly sales data for 446 music albums of 77 artists who died between 1992 and 2010. We show that album sales increase on average by 54.1 % after death and that the relative increase in sales is higher for the artist’s better albums. This suggests that death-related publicity serves primarily as informational advertising that attracts new customers who buy the artist’s best albums after death. Complementary evidence from a survey study with more than 2,000 participants confirms this interpretation and shows that information-based motives are relatively more important for after-death consumption than affect-based motives.     

Does God practice a random walk? The 'financial physics' of a nineteenth-century forerunner,Jules Regnault

We analyse the work of a neglected French economist, Jules Regnault, whose Calcul des Chances et Philosophie de la Bourse (1863) laid the basis of modern stochastic models of price behaviour and contains an anticipation of econometrics. At a time when short-term speculation was denounced as immoral, he approached this question ‘scientifically’ and constructed two models. The first one was relative to short-term speculation and took the shape of a random walk - a model used by Bachelier (1900). The second one deals with long-term speculation and aims at evaluating the mean value of the French 3 per cent bond.     

The “news view” of economic fluctuations: Evidence from aggregate Japanese data and sectoral US data

This paper uses aggregate Japanese data and sectoral US data to explore the properties of the joint behavior of stock prices and total factor productivity (TFP) with the aim of highlighting data patterns that are useful for evaluating business cycle theories. The approach used follows that presented in [Beaudry, P., Portier, F., 2004. News, stock prices and economic fluctuations. Working paper 10548. NBER]. The main findings are that (i) in both Japan and the US, innovations in stock prices that are contemporaneously orthogonal to TFP precede most of the long-run movements in total factor productivity and (ii) such stock prices innovations do not affect US sectoral TFPs contemporaneously, but do precede TFP increases in those sectors that are driving US TFP growth, namely durable goods, and among them equipment sectors. J. Japanese Int. Economies 19 (4) (2005) 635–652.     

Combining an inter-sectoral carbon tax with sectoral mitigation policies: Impacts on the French forest sector

As France works out its plan to tackle climate change issues, questions are arising in the forest sector as to how sectoral mitigation programs such as those designed to enhance fuelwood consumption or to stimulate in-forest carbon sequestration may coincide with an inter-sectoral program such as an economy-wide carbon tax. This paper provides insights into this question by exploring the impacts of (1) a combination of a carbon tax and a fuelwood policy, and (2) a combination of a carbon tax and a sequestration policy on (i) the economy of the forest sector, and (ii) the dynamics of the forest resource. To do this, we used a modified version of the French Forest Sector Model (FFSM) and carried out simulations on a 2020 time horizon. Basing our analysis on the fuelwood sector, we showed that wood producers always benefit from the combination of a carbon tax with either a fuelwood policy or a sequestration policy at the national level. Conversely, and although it favors wood products instead of non-wood substitutes, a carbon tax always decreases consumer surpluses by increasing wood product prices. As a consequence, the combination of a carbon tax with sectoral policies is likely to raise questions about the political economy of the mitigation program. This is particularly true in the case of a combination of a carbon tax with a sequestration policy, which already decreases consumer surpluses. We eventually showed that by increasing transport costs between domestic regions, the carbon tax reallocates production patterns over French territory which could lead to the necessity of a regional breakdown of policy-mixes in the forest sector.