Economic Integration, Factor Mobility, and Wage Convergence

This paper studies the effect of economic integrationof two regions on the mobility of skilled and unskilled workersacross regions and on the resulting location of industrial activity.In particular, we study what happens when wages in both regionsare set by the unions of the West—the region with agreater initial relative stock of human capital. We show thatunder some circumstances, it is the interest of the West's unionsto set up a speed of wage convergence greater than equilibrium,thus generating unemployment in the East. This slows the migrationof human capital toward the East, but quickens the migrationof raw labor toward the West. A greater share of economic activityis eventually located in the Western region. Unions in the Westwill benefit from this provided human capital has low migrationcosts relative to raw labor.     

Reactions to Shocks and Monetary Policy Regimes: Inflation Targeting Versus Flexible Currency Board in Sub‐Saharan Africa

The paper examines the monetary policy actions through which central banks in sub‐Saharan Africa have tried to eliminate the negative impacts of the shocks facing their economies. We compare two different monetary policy regimes: a currency board regime (in the CFA zone) and an inflation targeting policy regime (Ghana and South Africa) when central banks respond to demand, supply, and fiscal shocks. We extend the usual forecasting and policy analysis system models to replicate the economic features of these economies during the period 2002–12 and to evaluate the impact of several policies in response to these shocks. We find that both policies are inappropriate in helping the economies escape from the effects of negative demand shocks, both are essential when negative shocks to primary balance occur, while inflation targeting dominates the currency board regime as a strategy to cope with positive shocks to inflation.     

Research cycles

This paper studies the dynamics of fundamental research. We develop a simple model where researchers allocate their effort between improving existing fields and inventing new ones. A key assumption is that scientists derive utility from recognition from other scientists. We show that the economy can be either in a regime where new fields are constantly invented, and then converges to a steady state, or in a cyclical regime where periods of innovation alternate with periods of exploitation. Our analysis provides a rigorous foundation to the Kuhnian theory of scientific evolution. We show that scientists' care for reputation has a strong impact on research dynamics and tends to favor innovation. Especially, innovation fads may emerge. We also study welfare and find that the academic reputational reward system can help align scientists' short-term incentives with society's long-term interests.     

A good deal online: The Impacts of acquisition and transaction value on E-satisfaction and E-loyalty

Relying on Thaler's exchange theory, this research examines the unique effects of perceived transaction and acquisition values on consumer e-satisfaction and e-loyalty in an e-commerce setting, along with the moderating role of product/ service category. Overall, consumers' perceptions of transaction value lead to their e-dissatisfaction. Hence, obtaining a good deal does not have the same meaning and influence depending on the type of buying trip (exploratory or goal-directed). These results confirm Thaler's exchange theory's usefulness to analyzing the impact of perceived value on e-satisfaction and e-loyalty. Additionally, in a managerial perspective, this research underlines the importance of adapting promotional strategies to online contexts, since online purchase experience improves when there is an alignment between the customer's goals and the e-tailer’s online offering.     

Technological dualism,incomplete financial markets and economic development

A model is built in which, the more incomplete financial markets are, the more technological dualism is prevalent in the economy. The model is extended to show that, through dualism and technological choice, incomplete financial markets can have a negative impact on long-run growth.     

Around and Around: The Expectations Hypothesis

We show how to construct models of the term structure of interest rates in which the expectations hypothesis holds. McCulloch (1993) presents such a model, thereby contradicting an assertion by Cox, Ingersoll, and Ross (1981), but his example is Gaussian and falls outside the class of finite-dimensional Markovian models. We generalize McCulloch's model in three ways: (i) We provide an arbitrage-free characterization of the unbiased expectations hypothesis in terms of forward rates; (ii) we extend this characterization to a whole class of expectations hypotheses; and (iii) we show how to construct finite-dimensional Markovian and non-Gaussian examples.     

Agricultural productivity, trade, and industrialisation

Traditional development economics states that industrialisationmust be positively correlated with agricultural developmentas in the American and many European cases. However, some recentindustrialisation experiences suggests a negative link whichcan be supported by a simple Ricardian argument Yet this argumentis not consistent with the agricultural ‘leap forward’that often occurred before industrialisation took place. Here,we develop a model in which, for a closed economy, industrialisationfollows rising agricultural productivity. For a small open economy,multiple equilibria are possible and industrialisation tendsto be associated with low agricultural productivity, but istriggered by sudden changes in it.     

What drives agrifood firms to register for an Environmental Management System?

This paper examines empirically which factors determine voluntaryadoption of Environmental Management System (EMS) certification(ISO 14001 or EMAS) by agrifood industries. A discrete-choicemodel of EMS certification is applied to a sample of 1,000 Frenchagrifood firms. The findings suggest that management-relatedfactors drive certification more strongly than economic incentivesand provides a new perspective on Porter's theory of the doublebenefit of certification.