14 octobre 2016

The Triumph of the New Economic Geography

To introduce "its" New Economic Geography, Krugman (1991) starts by facts "one of the most remarkable things about  the United States is that [...] the bulk of the population resides in a few clusters of metropolitain areas. [...] nighttime satellite photos of Europe [] clearly suggest a center-periphery pattern whose hub is somehere in or near Belgium".

Here a picture of urban areas in 2010 (in red) in the US...

Not very red...
... and here a picture of light pollution by night in Europe where the Blue Banana or Core-Periphery scheme may be observed.

People are indeed not evenly distributed across space. Why? Mainly in reason of a trade-off between increasing returns and trade costs according to Krugman (1991). To understand this, think to the industrial revolution which by reducing dramatically trade costs and by fostering increasing returns (and thus wages and/or profits) in cities can explain partially the agglomeration of activities there.

Maybe when you are on a high speed train or when you think about futuristic ideas, like the Hyperloop, you wonder about the possible effects of these innovations on the location choice of people and firms.

Regional economics

In Krugman (1991), when trade costs are small enough then agglomeration forces dominate the dispersive ones and a virtuous circle of agglomeration occurs. This is the main result of Krugman (1991), let's now discuss the different effects that explain this result:

1) Local competition effect: an increase in the number of entrepreneurs in one region exacerbates local competition among firms. Thus new entry triggers a slump in the price index, and thereby in operating profits, too. So that in order to stay in the market, firms need to remunerate their workers less.
2) Market access effect: as the income generated by new entrepreneurs are spent locally, sales and operating profits increase and under the `zero profit condition' this implies a higher nominal wage.

When the local competition effect is higher than the market access effect, you get the "home market effect": a country with a share of world demand for a good that is larger than average will obtain a more than proportional share of world production of that good. The HME is still analyzed in international economics, see for instance this Costinot et al. (2016) article (with the interesting title "The More We Die, The More We Sell?"), and also Behrens et al. (2009) and Crozet and Trionfetti (2008) for  theoretical discussions and empirical tests.

3) Cost of living effect: goods are cheaper in a large agglomeration because imports are lower (many goods are produced there) and thus the burden of transaction costs too. Hence, the purchasing power of individuals are higher in this location, which attracts people.

This last effect has been less studied than the HME and it is quite dubious: the cost of living is considered by the layman as higher in large cities than in small ones, the reverse seems silly. However varieties consumed in small and large cities are not exactly the same, there is a bias due to the fact that in large cities wealthier households purchase more expensive varieties, a fact that is not in Krugman (1991). Handbury and Weinstein (2011) show that once they control for this composition effect, this cost of living effect is not so stupid, prices for the same good are actually lower in larger cities. One can however raise some doubt about its strength in comparison to the higher price of housing in large cities that heavy weight on the costs of living of individuals. In brief, agglomeration may destroy itself by increasing the cost of living in big cities.

By considering this, Krugman and Livas-Elizondo (1996) by introducing land rent and commuting costs reverse the result of Krugman (1991): trade integration leads to a dispersion of activities once urban costs are taken into account (see also Helpman, 1998; Murata and Thisse, 2005; Suedekum, 2006; Candau, 2011).

Differents authors have unified these two results, finding a process of dispersion-agglomeration-dispersion due to trade integration i.e. a rise and fall of regional inequality (Puga, 1998; Tabuchi, 1998). This bell shaped relationship between trade integration and agglomeration is certainly one of the main result of the NEG.

In France, Combes et al. (2008) find evidence of this concerning manufacturing and services that experienced bell-shaped spatial development curves, the agglomeration process reaching maxima around 1930. Kim (1998) has found the same result for the U.S. manufacturing industries, observing a dispersion tendency since 1950. At the European level, Brulhart and Traeger (2005) have observed a dispersion of activities at the national level and agglomeration at the regional one.

This is also a well verified fact in France, where the Core-Periphery pattern, considered by Gravier (1947) as "Paris and the French desert" has known a strong process of dispersion. Paris has lost activities and people relatively to Marseille, Lyon, Lille and many other large cities. In contrast, at the regional level, agglomeration has been the rule, these cities attracting activities from their immediate proximity. To illustrate this simply, just look this old "leopard" map of France (in red positive change of the population between 1975 and 1990, in green negative change). Obviously many other things can be said about this map, e.g. urban sprawl, but this is another story.

International economics

Krugman (1991) is a model belonging to the field of the regional economics because individuals working in the increasing returns sector can move from one region to another making wages endogeneous to location choices. This regional mobility of the labour force was not a feature of models developed in international economics, economists in that field were simply not interested by the local consequences of globalization such as the geographical change of activities inside a country (excepted Ohlin maybe).

Economists on international economics in the 90s were increasingly interested by trade of intermediate goods, this trade representing a growing part of international trade. Thus when Venables (1996) and Krugman and Venables (1995) propose a new version of Krugman (1991) with international trade of intermediate goods, the NEG takes a new dimension. The virtuous circle explaining agglomeration with this model is quite realistic. The agglomeration of firms producing intermediate goods leads to more competition implying a decrease of price that makes firms of the final goods more competitive, increasing their demand in local intermediate goods to save trade costs which fosters more agglomeration of firms in the intermediate sector and so on.

In this model, as in Krugman (1991), trade integration leads to a core-periphery pattern but this time at the international level. Interestingly, trade integration first leads to a divergence of income, and then when trade costs decrease even more, to convergence: the periphery gains in terms of real incomes, while the core nation can be a loser of this deeper integration. Gordon Hanson, a former Ph-D student of Paul Krugman, is certainly one of the authors of the NEG that has surpassed the master on this topic, with its analysis on the detrimental effect of trade with China on the U.S. economy in a series of article co-written with David Autor and David Dorn.

Urban economics 

Finally Krugman (1991) becomes urban with Fujita and Krugman (1995) from which the following Figure is borrowed.

The virtuous circle is exactly the same than in Krugman (1991) but now used to analyze a typical topic of urban economics, the emergence of an urban system. This first paper is mainly on the conditions of agglomeration in a single city, but Krugman (1996) already question the size distribution of cities in the United States which follows "a simpler power law: the number of cities whose population exceeds S is proportional to 1/S".

Finally Fujita, Krugman and Mori (1999) analyze the evolution of hierarchical urban systems.

However, the low hanging fruits of the NEG seems to have been picked in the regional/international fields. For instance regarding the city size distribution, Gabaix and Ioannides (2004) wrote "Models of the new economic geography (Fujita et al. (1999)) in their pure forms fail the task of predicting a Zipf’s law, and in fact not even a power law". In fact the NEG has known only recently a real success in urban economics (more on this in the next post).

At the end of the twentieth century, the triumph of the NEG was however clear, Krugman and its co-authors have propulsed the NEG in the AER, QJE, JPE and some empirical applications of the NEG have found similar success; such as Ades and Glaeser (1995) finding that trade liberalization does not impact the size of urban primacy (once endogeneity is treated), Davies and Weinstein (1999, 2003) finding that agglomeration may be a stable equilibrium despite violent shocks, Hanson (1998) analyzing the US local labor market and its regional integration and so on.

A new generation of researchers led by Anthony Venables, Richard Baldwin and Jacques-François Thisse were ready to extend the NEG to various domains. We are going to survey this new wave in the next post from the the NEG applied to public policies and to quantitative models that have been recently developed.

As a soundtract: Arcade Fire (Krugman is a fan) with the song "Ready to start".
In the lyrics you can hear:

All the kids have always known
That the emperor wears no clothes

This is a good transition for what is following (maybe in two weeks): the kids of the second wave of the NEG, their disillusion and their success.

F. Candau

To learn more on the NEG:

The Spatial Economy
Cities, Regions, and International Trade
By Masahisa Fujita, Paul Krugman and Anthony J. Venables

Economics of Agglomeration: Cities, Industrial Location, and Regional Growth
by Masahisa Fujita and Jacques-Francois Thisse

Economic Geography and Public Policy
Richard Baldwin, Rikard Forslid, Philippe Martin, Gianmarco Ottaviano, & Frederic Robert-Nicoud

Economic Geography: The Integration of Regions and Nations
by Pierre-Philippe Combes, Thierry Mayer & Jacques-François Thisse

There are also many interesting surveys, see in particular Neary (2001)Behrens and Robert-Nicoud and maybe Candau (2008).

References (incomplete)

  • Davis D. and Weinstein, D., 2002. Bones, Bombs, and Break Points: The Geography of Economic Activity, American Economic Review 92: 1269-1289.
  • Candau, 2011, Is agglomeration Desirable? Annals of Economics and Statistics. Vol 101/102, 203-229.
  • Candau F, 2008. Entrepreneurs’ Location Choice and Public Policies, a Survey of the New Economic Geography. Journal of Economic Surveys. Vol. 22, Issue 5, pp. 909-952.
  • Hanson, G. H. (2001) U.S.-Mexico Integration and Regional Economies: Evidence from Border-City Pairs, Journal of Urban Economics 50: 259-287.
  • Hanson, G. H. (2005) Market Potential, Increasing Returns, and Geographic Concentration. Journal of International Economics 67: 1-24.
  • Helpman, H. (1998) The Size of Region, In D. Pines, E. Sadka, and I. Zildcha (eds.). Topic in public economics. Theorical and Applied Analysis. Cambridge: Cambridge University Press, 33-54.
  • Krugman, P. (1991) Increasing Returns and Economic Geography. Journal of Political Economy 99: 483-499.
  • Krugman, P. and Livas, R. (1996) Trade policy and the third world metropolis. Journal of development Economics 49: 137-150.
  • Krugman P and Venables AJ (1995) Globalization and the inequality of nations. Quarterly Journal of Economics 110: 857-880
  • Murata Y and Thisse J-F (2005) A simple model of economic geography à la Helpman-Tabuchi. Journal of Urban Economics 58: 137-155.
  • Puga, D. (1999) Rise and fall of regional inequalities. European Economic Review 43: 303-334.
  • Sudekum J., (2006). Agglomeration and Regional Costs-of-Living, Journal of Regional Science 46, p 529-543.
  • Sudekum J., (2008). Regional Costs-of-Living with Congestion and Amenity Differences - An Economic Geography Perspective, Annals of Regional Science.
  • Tabuchi, T. (1998) Urban agglomeration and dispersion: a synthesis of Alonso and Krugman, Journal of Urban Economics 44: 333-351.
  • Venables, AJ. (1996) Equilibrium locations of vertically linked industries. International Economic Review 37: 341-359.

13 octobre 2016

Comments on Intra-Industry Trade

"The majority of trade is not across sectors but rather within industries. That is, instead of observing a country that exports tiles to import shirts, we observe a country that exports tiles to also import tiles, and we observe the same country to export and import shirts.
Grubel and Lloyd (1975) developed an index, now known as the Grubel-Lloyd index, for measuring the fraction of trade flows that take place within industries as opposed to across sectors. Using this decomposition they showed that in many countries the majority of trade is intra-industry rather than intersectoral." H. Helpman, 2011, Understanding Global Trade, page 102.

As I explained in the previous post, the finding that "the majority of trade is intra-industry rather than intersectoral" explains why models of the New Trade Theory have known such a success since they typically analyze this trade of varieties between similar nations. When I teach this story to my students I always ask, as every teacher, "Have you got any questions?", they don't have, I beg "please, try to criticize", they don't. It's a pity because many questions can be ask, such as "how do you define exactly an industry?", this is an important question because if you compute the Grubel and Lloyd indicator at different levels of the international classification of goods, you obviously don't have the same results (see below the comparison between 3-digit and 5-digit from Brulhart, 2009).

When you see this number, you realize there is "only" 43.7% of intra-industrial trade at the world level (at the 3-digit level) which means that there is still a large amount of trade that is intersectoral.

Furthermore, in the sentence of Helpman ("in many countries the majority of trade is intra-industry"), in addition to question the measure of "the majority of trade" we also need to question who are these "many countries" between which intra-industry trade occurs.

Intrasectoral trade concerns mainly rich and intermediate countries (see the Figure below from Brulhart (2009), line Hi-Hi and Med-Hi), representing respectively around 40% and 30% of their trade. In contrast, one can observe that there is very few intra-sectoral trade between similar countries that are poors or between countries with intermediate level of incomes (Low-Low, Med-Med).

You also have to be skeptical about what are "similar products", indeed since the 80s, the literature has improved its description of intra-industry trade and has observed that a bulk of that trade concerns goods that are vertically differentiated. So don't mix up the theoretical models of the 80s that analyze trade of horizontally differenciated varieties and the reality. On the Figure below, from Fontagné, Freudenbeg and Gaulier (2006) you can see that vertical intra-EU12 trade has increased between 1980-99 while trade of varieties differenciated horizontally has been constant.
With Cabral et al. (2006) we can conclude that "the distinction between trade in horizontally and vertically differentiated products [...] seems to be as important as the distinction between inter-and intra-industry trade” (pg. 562).*

Another important point (quite related): many of the models that we use in the classroom speak about trade of final products. In fact, a large share of trade concerns trade in intermediate goods, and this is also true to explain intra-sectoral trade, see below the share of intra-sectoral goods by product group.

F. Candau

As a soundtract of this post, because he just won a well deserved Nobel Prize in literature, Bob Dylan, "Don't Think Twice, It's All Right".

References and sources: Figure 1, 2 and 4 comes from Brülhart (2009), An Account of Global Intra-industry Trade, 1962-2006, The World Economy, vol. 32(3), pages 401-459, 03. Figure 3 comes from Fontagné, Freudenberg and Gaulier, (2006) A Systematic Decomposition of World Trade into Horizontal and Vertical IIT. Review of World Economics.

*I have borrowed this quotation of Cabral et al. to Azhar and Elliott (2011) that proposes an interesting measure of trade induced adjustment in volume and quality space.

10 octobre 2016

New Economic Geography Begins

Once upon a time, a famous researcher in international economics wanted to win new fans in regional and urban economics. This guy was famous for good reasons: he was one of the first to use a simple model with increasing returns, trade costs and monopolistic competition to analyse international trade and to obtain clear-cut results. The "home market effect" is one of them, in Krugman (1980) conditions under which countries export goods for which they have relatively large domestic markets are, maybe for the first time, clearly established. Obviously, Linder and many other have developed similar thesis by considering that specialization can come from the domestic demand, but the use of "small models applied to real problems, blending real-world observation and a little mathematics to cut through to the core of an issue" so typical to the MIT (see Cherrier (2014)) was new in international economics. [Edit 11/10/16: Today, P Krugman uses this Home Market Effect to explain the depreciation of the pound since the vote on Brexit]

In other simple models, Krugman (1979, 1981) explains intra-industry trade another real-world observation that cannot be explained with neo-classical models. With Helpman, they wrote in 1985 an important textbook for graduate, offering a integrated treatment of a variety of issues in international trade. The ambition was nothing less than "to make this branch part of the core of trade theory rather than merely a promising new area". This monograph has been very influential to popularize the New Trade Theory (NTT).

It was also the right moment. Indeed the conclusions of the NTT were that trade policies can be used strategically to protect some industries and in the 80s, in response to globalization and in particular competition from Japan; this kind of idea were useful for policymakers. For instance in 1983 Reagan raises tariffs to protect Harley-Davidson in an incomparable way, according to the New-York Times
Obviously trade theorists, Krugman included, were against these policies, considering with Krishna, Hogan and Swagel (1994) that "it remains vital not to oversell such models to policymakers".

Many elements of the New Economic Geography of Krugman (1991) was already in Krugman (1980). In its own words (quoted by Robert-Nicoud and Behrens) "Why exactly I spent a decade between showing how the interaction of transport costs and increasing returns at the level of the plant could lead to the ‘home market effect’ and realizing that the techniques developed there led naturally to simple models of regional divergence (Krugman 1980, 1991a and c) remains a mystery to me. The only good news was that nobody else picked up that 100 dollars bill lying on the sidewalk in the interim."

Indeed in the 80s the bill lying on the sidewalk has not been picked but urban and regional economics has been an active field thanks to economists working on spatial competition and due to geographers.

Urban studies 1970-1990

While the international context was beneficial to economists of the NTT in the 80s, the urban situation was totally detrimental to neo-classical economists in urban studies. In the 70s and 80s, many large cities in developed countries have known dramatic downturn. 

Industrial relocation and public deregulation have led to an important decline of many metropolis that we consider now as safe and beautiful. For instance in 1980 the number of homicides was three times higher than today in NY.
Source: O’Flaherty and Sethi (2014)

The incredible increase in cocaine, crack, heroin in the streets of these cities was also a new phenomenon (Narcos, big time).

I guess that economists and theirs models with perfect competition have found an hostile ground during that period. Beatrice Cherrier reports an interesting debate between economists, with Richardson (1973) criticizing Solow and Mirrlees for their (lack of) contributions as follows:

"The key impulse to urban economic research is … the urgent policy needs of how to handle and control metropolitan cities. A danger in papers of the kind discussed here is that they are likely to distract the attention of researchers away from the policy end of the spectrum towards the mathematical modeling end …This would be a good thing if the models developed were capable of aiding policy solutions, but my fear is that … the choice of model structures will be determined by their capacity to yield to mathematical tricks, and that this implies the most abstracts and simple cases. It would be a disaster if a policy-oriented field such as urban economics went the way of growth theory"

It becomes also clearer than never for economists that a world with constant returns and competition was a "world without cities" to quote Mills (1967, p198). In 1978, Starrett even presents an impossibility theorem of agglomeration with perfect competition (and homogeneous space)... It was time for urban economists to drop out their old models with perfect competition.

Two kinds of imperfect competition were considered as crutial to analyze the spatial economy: strategic interactions between firms that compete in price but also in term of location and increasing returns. Hotelling (1929) and its principle of minimum differenciation analyzed the first kind of imperfection (the NEG is born latter on the second one linking trade costs, increasing returns and monopolistic competition).

According to Hotelling, firms which compete to attract customers, minimize their spatial differentiation. In 1979, d'Aspremont, Gabszewicz and Thisse show that Hotelling was wrong since there is no price equilibrium in pure strategies when firms are agglomerated: price competition is a strong dispersive force, and firms that sell identical products, maximize their spatial differentiation to relax this competition.  This analysis has stimulated many contributions on spatial competition in urban economics. One can notice that Hotelling was however "almost right" when firms compete in a multi-characteristic space (Irmen and Thisse, 1998). Hard to not see the agglomeration of restaurants that supply different kind of foods under that lens.

Despite these important works on spatial competition, the lack of a general model of monopolistic competition and increasing returns was clearly a drawback for economists.

About Geographers

In contrast, geographers have many new champions. Needless to say, what follows is not exhaustive, only suggestive of the dynamism of studies in human geography.

First, geography has known its quantitative revolution during the 60s. Many geographers were able to construct econometric models and to analyze very concrete problems. Brian Berry, winner of the Vautrin Lud Prize, was for instance a precursor in the analysis of many problems that are at the heart of urban economics. See for instance its JUE paper in 1976 in which he analyzes ghetto expansion and housing prices. In that study, he considers the urban housing stock as "racial filtering", black families became owners when white households left poor center for residential suburbs (see Boustan and Margo (2013) for a brief review of the literature on that subject and new results showing that up to one half of the national increase in black homeownership between 1940-1980 can be attributed to white suburbanization).

Jane Jacobs, urbanist, has also made significant contributions in urban economics. Jacobs (1969, 1984), for instance consider that technological spillovers between industries may be more important than inside industries to explain urban growth. This is an important point going against many theories (Marshall-Arrow-Romer and Porter) implying that the variety and the diversity of industries matter more than geographical specialization to foster innovation and growth.

The 70s and 80s also gave birth to behavioural and radical geography. David Harvey is a central figure of the radical movement. He wrote in 1973 a book "Social Justice and the City" which according to Urban Studies "makes quite clear that urban geography and non-marxist urban economics can never be quite the same again". In this book, which is surprisingly readable for an economist (Harvey speaks about Alonso, Muth, Smith and many other economists in respect), he proposes a marxist approach applied to cities, considering that over-accumulation of capital at the city level inevitably leads to urban crisis. After "The Limits to Capital" in 1983, the reputation and idea of Harvey were enough popular to influence many geographers and policy makers in the UK and in the US. I am however not sure of its influence on economists.

There is also new kinds of scientists interested by cities like Jay Forrester who was a computer engineer, known for the bullwhip effect, who wrote in 1969 Urban Dynamics with the aim to understand the complex system of cities with stocks, flows and many other parameters. His work has influenced the Club of Rome (its colleague, Dennis Meadows, was the director of the study "Limits to Growth") and many urban planners.

To conclude this section, one needs to keep things in perspective. Economists have met difficult challenges in the 70s and 80s and maybe the 80s have not produced long lasting models as the 60s (Alonso, 1964), or the 70s (Henderson, 1974) but many contributions were announcing the next revolution, in particular many papers by Masahisa Fujita (I will come back on that in the next post).

Furthermore, the decline of urban economics is debatable, Jennifer Roback (1982) for instance has written an important contribution on the role of amenities on wages, rents and on the quality of life that is still a reference (among many, see this paper by Rebecca Diamond on skill sorting). Furthermore, seminal models of the 60s have been used during the following decades to analyze different public policies, e.g. in urban public finance, see authors like Anas, Arnott, Brueckner, Wildasin, Zodrow etc.

The next post (here it is) is going to be on the NEG, if you cannot wait, start to read Peter Neary about the "hype and hyperbolas" of the NEG. Here the hype:

"[Fujita, Krugman and Venables] find the predictions of one model so plausible that they call it "History of the World, Part I" (p. 253); they describe the pattern of world industrialisation implied by another as "a story of breathtaking scope" (p. 277); and on his website Krugman expresses the hope that economic geography will one day become as important a field as international trade. This sort of hype, even if tongue-in-cheek, is not to everyone’s taste [...]. What next, the unconvinced reader may be tempted to ask? the tee-shirt? the movie?"

Really, read it, because it is not every day that you can find a paper in the Journal of Economic Literature that concludes by speaking about the mini-skirts and the Beatles.

F. Candau

As a soundtrack, Max proposes Esctasy of Gold, I've found this version below interesting (Backened follows with it's optimistic view "Never a rebirth, evolution's end" that may be (or not!) a topical question concerning the NEG).


Alonso, W. (1964) Location and land use. Cambridge, MA:Harvard University Press.
Boustan, L, and R A Margo, 2013. "A Silver Lining to White Flight? White Suburbanization and African-American Homeownership, 1940-1980," Journal of Urban Economics.
Neary, P. (2001) Of hype and hyperbolas : introducing the new economic geography, Journal of Economic Literature 39: 536-561.
Irmen A, J-F Thisse, 1998. Competition in Multi-characteristics Spaces: Hotelling Was Almost Right. journal of economic theory 78, 76 102
Jacobs, J. (1969) The Economy of Cities. New York: Vintage.
Jacobs, J. (1984) Cities and the Wealth of Nations: Principles of Economic Life. New York:Vintage.
Krugman, P. (1979) Increasing returns, monopolistic competition, and international trade. Journal of International Economics 9: 469-479.
Krugman, P. (1980) Scale economies, product differentiation, and the pattern of trade. The American Economic Review 70: 950-59.
Krugman, P. (1991) Increasing Returns and Economic Geography. Journal of Political Economy 99: 483-499.
d'Aspremont C., J. J. Gabszewicz, and J.-F. Thisse, On Hotelling's stability in competition, Econometrica 47 (1979), 1145 1150.
Hotelling H., Stability in competition, Economical Journal 39 (1929), 41 57.
Starrett, D (1978) Market allocations of location choice in a model with free mobility. Journal of Economic Theory 17: 21-37.
von Thünen, JH. (1826) Der Isolierte Staat in Beziehung auf Landwirtschaft und Nationalökonomie (Perthes, Hamburg) English translation The Isolated State (Pergammon Press, Oxford)

07 octobre 2016

The New Economic Geography is dead, long live the New Economic Geography!

Coming soon here a series of wonkish posts on my field, the New Economy Geography (NEG) born with Krugman (1991) and about urban economics. This series is motivated by a discussion with Beatrice Cherrier, a "though leader" among historians of economics, who suggests that the NEG has cannibalized urban economics. 

I don't think so, the NEG has brought very little contributions to urban studies and in this series I will show that the opposite hold, many authors that have started their carrier with the NEG are now urban or trade economists that only occasionally use the NEG framework which is something like a Proust's madeleine for them. Instead, urban and international economics have cannibalized the NEG. The NEG is dead, long live to the NEG!

This announcement is not a teaser (ok, maybe a little), just the illustration that I don't have many time to blog, so I will divide this task in three parts.

On Friday, something about the triumph of the NEG 1990-2000.

Next week, the last hope of reunification with quantitative models.

F. Candau

As a soundtrack of this post, Max (alias @blinis), proposes "Battle for the Soul of the Universe" ;)

28 septembre 2016

07 septembre 2016

Blogos fr

Arthur Charpentier et Thomas Renault viennent d'écrire un post sur la blogosphère économique française dans lequel ils s'interrogent sur son manque de dynamisme. La comparaison avec les blogs américains est en effet peu flatteuse et la blogosphère française a même perdue en dynamisme ces dernières années. Par exemple certains blogs "historiques" présents sur le graphique ci-dessous sont inactifs et n'ont pas été réellement remplacés.
Source: Freakonometrics.
Note: Cooool notre blog est bien dans le réseau!!

Ils identifient l'effet d'une taille critique du réseau pour expliquer ces faits, il y a aussi peut-être d'autres raisons qui expliquent cette faible activité:
  • La demande d'analyse économique est plus faible en France.*
  • L'offre est abondante. Typiquement lorsqu'un blogueur français lit les bons débats américains, ou des tribunes dans vox-eu/ofce/cepii, il a un peu la flemme de se lancer dans un post. On se contente de retweeter pour nos étudiants/lecteurs (ou d'orienter vers Martin Anota qui fait parfois les traductions). Lorsqu'il y a des thématiques spécifiquement françaises, elles sont souvent si largement traitées qu'un débat blogolistique semble inutile. La récente "loi travail" est sans doute l'exemple le plus emblématique avec des tribunes de divers collectifs d'économistes qui se sont engagés sur ce sujet. Difficile de dire si ce genre de débat va se poursuivre à l'avenir mais d'une façon générale il faut bien constater que les débats économiques sont bien meilleurs qu'il y a une quinzaine d'années. 
  • Raisons institutionnelles. Les incitations à bloguer, du moins pour un prof français, sont limitées. C'est sans doute différent dans les facs américaines pour des raisons institutionnelles qui m'échappent (tâches administratives moins lourdes? Heures de cours? Concurrence plus forte pour attirer des étudiants et des financeurs?)
  • Enfin, c'est peut-être aussi culturel. En France, il y a cette idée méprisante que les "vrais" auteurs/chercheurs sont censés ne pas avoir de temps à perdre sur un blog.
Ceci étant dit, et comme je ne souhaite pas terminer ce post par une note négative, je reste persuadé qu'il a de bonnes raisons pour se lancer dans l'aventure. La plupart des blogs français qui ont connu un certains succès, e.g. Ecopublix, ont réellement permis à leurs jeunes auteurs de se faire connaître (et il est amusant de remarquer qu'ils en sont toujours fiers, sur le cv d'Antoine Bozio vous pouvez par exemple lire "Contributeur au blog Ecopublix consacré à l’économie des politiques publiques"). Je suis sûr aussi que les talents du captain aideront (ou ont déjà aidé) le jeune Thomas Renault et que les posts d'Elisa sur le présent blog ont été un petit plus dans certaines auditions. D'autre part, malgré l'offre pléthorique**, il y a toujours de la place pour rédiger des choses originales qui seront lues, les blogs survivants (Freakonometrics, Classe éco, Econonum, Reste du Monde et bien d'autres) en sont la preuve (dans les disparus, en plus de ceux cités ici on peut indiquer Expeconomics de Laurent Denant-Boemont, Mutatis mutandis d'Anne Lavigne ou le bien plus éphémère Frogoeconomics de Farhi, Gourinchas, Thesmar et al, etc). Enfin, si vous êtes enseignant, vous savez déjà qu'une grande partie de vos étudiants ne lit absolument rien, par contre si vous avez un blog, ils liront vos écrits (pronostic sur le sujet d'exam oblige...), tenir un blog est donc une bonne façon de les faire lire.  

F. Candau

*A défaut d'une estimation, voici une anecdote: l'une des premières choses que les gens me disent lorsque je dis que je suis prof d'éco c'est "Aaah, comme disait Bernard Maris, vous connaissez?, oui, ben, un économiste c'est bien quelqu'un qui explique le lendemain pourquoi il s'était trompé la veille?! Hihihi HuHuHu"... puis ensuite ils passent à autre chose, ce qui me donne vaguement l'impression qu'ils ne sont pas intéressés par l'économie... mais mon expérience est sans doute non représentative et/ou c'est certainement la même chose dans d'autres pays. L'effet taille du pays par contre doit jouer énormément pour expliquer la différence entre la France et les Etats-Unis.
** Franchement il y a certains blogs (listé en jaune par exemple) qui sont peu recommandables, l'offre de qualité n'est pas si pléthorique que ça. 

01 septembre 2016

Potential and Limitations of Reforming the Financing of the EU Budget

Our study on the EU budget (commissioned by the European Commission on behalf of the High Level Group on Own Resources with Mario Monti as a chairman) is now available here.

This report, written by a pluridisciplinary team (Jorge Núñez Ferrer, Jacques Le Cacheux, Giacomo Benedetto, Mathieu Saunier, Claude Emonnot, Florence Lachet-Touya, Jorgen Mortensen, Aymeric Potteau, Igor Taranic and me) is divided into five parts:

Part I outlines the present status, what has changed over the last years and the need for a budget to enable the EU to face its present difficulties.

Part II looks at the challenges and opportunities for reforming the budget from a political and legal perspective.

Part III goes into detail about the potential elements of a reform, from an assessment of new resources to reforms connected with expenditure-side improvements.

Part IV presents a set of possible package deals and discusses their merit.

Part V discusses further wider issues concerning the role of the EU budget in relation with the Eurozone and additional considerations, such as the duration of the MFF.

24 août 2016

Burqa, burkini et un peu de droit français

Face à cette polémique du burkini, je repense à une audition d'un de nos collègues, Denys de Béchillon, qui démontre de façon remarquable les limites d'une interdiction du voile intégral face aux droits fondamentaux français. La vidéo est ici (débutez la vidéo vers les 10 min si vous êtes pressé) et le texte ici dont voici qq extraits:

"la prohibition de la burqa réaliserait une ingérence forte dans l’existence d’au moins trois droits fondamentaux :
– la liberté de religion, à partir du moment où ce droit comporte intrinsèquement celui de manifester sa religion, et donc, dans une assez large mesure, la liberté de la manifester comme on l’entend ;
– la liberté d’opinion et donc, là encore, la liberté de manifester son opinion, y compris sur la manière dont on doit soi-même se conduire en public ;
– la liberté d’aller et venir, puisqu’une loi visant à empêcher les femmes de se promener en burqa dans la rue pourrait s’analyser dans une certaine mesure en une restriction de leurs possibilités de déplacements.


les ressources juridiques aujourd’hui disponibles pour envisager une interdiction de la burqa sont potentiellement au nombre de trois : le principe de laïcité ; la protection de l’ordre public et de la sécurité publique ; la dignité de la personne humaine et l’égalité des sexes, envisagée sous l’angle de la dignité des femmes. Interrogeons ensemble ces fondements possibles, et demandons-nous s’ils sont à la fois efficients et suffisants pour justifier l’interdiction qui nous occupe.


J’ignore combien de femmes sous burqa sont effectivement libres de leur décision. Certaines le sont ; d’autres ne le sont pas. Je ne sais pas compter, et sans doute vous non plus. Mais en l’état actuel du droit et probablement de la philosophie politique de nos démocraties, il me semble difficile de décider à leur place si elles sont libres ou non. La démocratie comporte le risque de vivre avec des monstres qui nuisent à eux-mêmes. C’est infiniment triste. Mais nous ne pouvons pas envisager de les priver de leur liberté sans contredire l’un des principes d’organisation les plus importants de nos sociétés modernes.

24 juin 2016

22 juin 2016

Women in Economics (WinE)

Petite vidéo sur l'excellente initiative Women in Economics de l'European Economic Association.

L’acronyme WinE, c'est évidemment pour le Win, #girlpower, et pas "wine", #St-Emilion, mais il est possible d'allier les deux, c'est l'occas de faire un peu de pub à la première présentation de ma nouvelle doctorante Julie Schlick qui présente demain notre papier "How Income and Crowding Effects Influence the World Market for French Wines" à l'American Association of Wine Economists.

et pour le WinE sans wine, ovation et encouragements aussi à la co-auteure de ce blog, Elisa Dienesch, qui présente après demain notre papier "Pollution Haven and Corruption Paradise" à l'European Association of Environmental and Resource Economists.

04 avril 2016

Evasion fiscale et incidence

Les révélations des médias sur la place et le rôle du Panama sont une excellente nouvelle, cela va sans doute permettre à la justice de plusieurs pays d'utiliser les pièces manquantes d'un puzzle de fraude fiscale souvent difficiles à rassembler

Nous allons ici aborder l'évasion fiscale des firmes multinationales, celles des footballeurs et hommes politiques faisant déjà la une de la presse (voir icij et Le Monde qui bossent sur le sujet depuis des mois).

Biens intangibles, prix de transfert et érosion des bases fiscales

Le système international de taxation des profits à la source date des années 20 et il est notoirement déficient. La règle consistant à séparer les profits pour les taxer à la source (arm’s length principle), implique que des multinationales qui échangent en leur sein des biens doivent trouver un prix sur le marché correspondant à cette transaction. Il est cependant aisé de manipuler ces prix de transferts, il suffit à une filiale implantée dans un pays taxant faiblement les profits d'exporter vers une filiale dans un pays les taxant fortement; résultat: peu de profit à taxer dans ce pays et peu de taxation dans le pays où les profits sont transférés. La situation est encore pire lorsqu'il n'y a pas de prix de référence, par exemple que dire du prix de la technologie de Google USA vendue en 2003 (soit juste avant l'introduction en bourse) à Google Ireland Holdings résidant aux Bermudes?

Deux papiers très intéressants sur le sujet des prix de transferts. Le papier de Vicard (2014) qui estime à 10% la perte de revenu pour le fisc français d'après ce mécanisme (8 milliards) et le papier de Davies, Martin, Parenti, and Toubal (2015) qui, basé sur des données très précises, est bien plus optimiste comme en témoigne la fin de leur abstract:

"We find almost no evidence of tax avoidance if we disregard exports to tax havens. Back-of-the-envelope calculations suggest that tax avoidance through transfer pricing amounts to about 1% of the total corporate taxes collected by tax authorities in France. The lion’s share of this loss is driven by the exports of 450 firms to ten tax havens. As such, it may be possible to achieve significant revenue increases with minimal cost by targeting enforcement".


Il est totalement scandaleux que les détenteurs de capitaux perçoivent une rente qui échappe à l'impôt alors que les individus contribuent à la fois via leurs revenus et via leurs consommations (idem pour les entrepreneurs et firmes domestiques qui subissent une perte de compétitivité par rapport aux multinationales). Mais le problème moral est en fait bien plus grand si l'on songe à l'incidence des taxes. Est-on sûr qu'en taxant les profits des multinationales seuls les détenteurs de capitaux sont taxés? Harberger (1962) répond oui dans un cadre très particulier: une économie fermée... A partir du moment où l'économie est ouverte, les salariés trinquent. Voir par exemple l'article d'Arulampalam, Devereux and Maffini (2012) qui montre que 1$ d'augmentation des taxes sur les sociétés se transforme en une baisse de 50 cents des salaires. Les firmes multinationales peuvent aussi absorber la taxe en haussant les prix des biens vendus ou en mettant la pression sur les fournisseurs...bref la question de l'incidence ne remet pas en question la nécessité de taxer le capital, au contraire elle pose la question de comment le taxer pour qu'il paye réellement sa contribution. Comme le note nombre d'auteurs il faut vraiment réfléchir à une nouvelle façon de taxer les firmes multinationales, voir entre autre Devereux et Sorensen (2005), notamment la dernière partie (et aussi, évidemment, Zucman, 2013) ainsi que des travaux plus récents de Devereux, pour conclure je citerais d'ailleurs Devereux et Vella (2014):

"Even if the actions proposed by the OECD are successfully implemented, the international tax regime will still not be fit for purpose. The regime will consist of a confused, complex mass of arcane, arbitrary and sometimes illogical rules [...]

Admittedly, a shift away from the current framework is difficult because strong path dependencies have developed over the past hundred years in which the current framework has been in place. Any shift requiring international cooperation will be particularly hard to implement. However, whilst not underestimating these difficulties, exploring these options is important". 

F. Candau


Arulampalam W, Devereux M and Maffini G (2012) The Direct Incidence of Corporate Income Tax on Wages. European Economic Review. Volume 56, Issue 6, Pages 1038–1054

Davies, R, Martin J, M Parenti and F Toubal, 2015. Knocking on Tax Haven’s Door: Multinational Firms and Transfer Pricing. CEPR Discussion Papers 10844

Devereux M, Sorensen P, 2005. The Corporate Income Tax: International Trends and Options for Fundamental Reform, European Economy.

Harberger, Arnold C., 1962.The incidence of the corporation income tax. Journal of Political Economy 70,215–240.

Vicard, V. (2014), Transfer pricing of multinational companies and aggregate trade. WP 555 Banque de France.

Zucman, G. 2013. Richesse cachée des nations. Seuil.

17 mars 2016

Behavorial Economics

Les sciences économiques se sont diversifiées au cours des trente dernières années et l'économie comportementale est sans doute l'une des disciplines qui s'est le plus développée sur cet intervalle. L'objectif a été de mieux comprendre les décisions économiques des agents pour amender et améliorer les enseignements de la microéconomie de base (optimisation, équilibre etc). L'économie comportementale a développé plusieurs analyses et méthodes qui sont désormais des disciplines à part entière telles que l'économie expérimentale, l'économie psychologique ou encore la neuroéconomie.

David Laibson and John A. List ont récemment écrit un papier intitulé "Behavorial Economics in the Classroom" qui résume les "principes" qui peuvent être tirés de ces analyses.

En résumé l'économie comportementale (prospect theory initialement) a montré que les décisions risqués sont évalués par les individus en termes de gains et de pertes par rapport à un point de référence (par exemple le revenu actuel), cette référence ou encore cette contextualisation de la décision peut conduire à de mauvais choix. De plus les agents n'évaluent pas les pertes de la même façon que les gains, ils surestiment l'occurrence des événements rares (e.g. terrorisme), sous-estime ceux dont la probabilité est grande et ils peuvent aussi avoir trop confiance en eux ou dans des choses qu'ils croient connaître. Les investisseurs ont par exemple tendance à avoir une préférence pour des investissements “familiers” et surestiment souvent la performance des firmes de leur pays (home bias). Les français détiennent ainsi beaucoup plus d'actions Renault que les américains (voir Rey et Coeurdacier (2011, JEL) pour une revue de la littérature sur le home bias financier).

Autre exemple (parmi bien d'autres), les américains n'épargnent pas suffisamment pour leur retraite, pourquoi? Est-ce un problème économique? d'information? Lorsqu'on leur pose la question, ils disent qu'ils ont conscience du problème et qu'ils vont justement augmenter leur épargne, mais pas aujourd'hui, demain. Le problème, c'est que demain, c'est toujours demain. Les individus ont clairement des problèmes de self-control, la façon dont il décompte l'effort futur est clairement incohérente avec leurs préférences et leurs choix d'aujourd'hui (voir les premiers travaux de Laibson sur l'hyperbolic discounting). Bref, la procrastination fait partie des traits comportementaux nous conduisant à réaliser de mauvais choix.

Les individus ont aussi tendance a valoriser beaucoup plus un bien qu'ils possèdent que ce même bien s'ils ne le possèdent pas, ou plus précisément ils ne sont pas prêts à payer grand chose pour augmenter leur dotation par contre ils seront très réticent à la voir diminuer (endowment effect de Thaler).

Enfin les interactions sociales jouent un grand rôle sur les décisions économiques des individus.

Ces nouveaux éléments dans l'analyse des comportements économiques ont enrichi les travaux de finance, d'économie du travail, du développement, etc.... DellaVigna (2009, JEL)Pesendorfer (2006, JEL), et Barberis (2012, NBER) offrent des revues de la littérature qui pourront vous intéresser.

Pour d'autres enseignements, notamment en économie publique, voir cette vidéo rassemblant plusieurs contributions. Tout d'abord Raj Chetty qui utilise des Big Data (1 milliard d'obs) pour comprendre les réactions fiscales des américains dans différents Etats au cours du temps, puis Olivia Mitchell sur la sécu américaine, Naomie Feldman sur une politique familiale (child tax credit) et Johannes Schmieder sur les allocations chômage. Here the power of the nudge!

David Laibson a aussi récemment participé à une revue de la littérature d'une autre science économique relativement nouvelle (et reliée à la précédente): la neuroéconomie.

Edit: léger souci pour répondre aux commentaires, je poste donc ici ma réponse:
McCabbe, Glimcher et Smith ont été les initiateurs et promoteurs de la neuroéconomie vers la fin des années 90 début des années 2000. Pour une histoire de la pensée en français de la neuroeco il y a cette thèse de Nicolas Vallois https://tel.archives-ouvertes.fr/tel-00765033/document

14 mars 2016

Currency war d'après Gita Gopinath

Court entretien avec Gita Gopinath sur l'impact des dévaluations. Comme elle le rappelle les effets sont asymétriques, une dépréciation/appréciation du dollar qui est la monnaie de référence a d'important effets pour la compétitivité américaine. A l'inverse, la dépréciation d'un petit pays aura peu d'effet... à écouter (c'est court, 4min!)....

...et à méditer si vous pensez qu'une sortie de l'euro permettrait à n'importe quel pays de gagner une guerre des monnaies.

Voir les travaux de cette auteure pour en savoir plus ici.

06 mars 2016

Les paradis fiscaux, c'est terminé

Excellente nouvelle en provenance du ministère des finances, le montant des redressements fiscaux est de 21,2 milliards d’euros pour 2015, soit une nette augmentation par rapport à l'année passée. Evidemment tout n'est pas recouvré, seulement 12 milliards sont rentrés dans les caisses, mais c'est déjà pas mal. Alors peut-on conclure avec Nicolas Sarkozy "il n'y a plus de paradis fiscaux [...] c'est terminé", ou avec Michel Sapin "On a tourné une page. Il y a une nouvelle mentalité au niveau mondial".

La question épineuse est évidemment de savoir quel pourcentage ces chiffres représentent par rapport au total de fraude et d'évasion fiscale. D'après Gabriel Zucman (2013), environ 12% du patrimoine financier des ménages européens est détenu dans un paradis fiscal et les ménages français détiennent environ 175 milliards d'euros en Suisse. Selon cet auteur, si cette évasion fiscale n'existait pas et si ces sommes étaient taxées normalement (i.e. aux taux en vigueur), la dette de la France ne serait pas de 95% mais de 70% du PIB. Au niveau mondial, les chiffres sont encore plus vertigineux, environ 5800 milliards d'euros soit 8% du patrimoine financier échapperait à tout impôt.
Historiquement, en ce qui concerne la France, cette évasion a en grande partie été organisée depuis la Suisse. D'ailleurs sur les 44 894 dossiers de régularisation, soit 27 milliards d’euros traité depuis 2013 par le service de traitement des déclarations rectificatives, environ 90% étaient domiciliés en Suisse.

L'attractivité de la Suisse pour les capitaux à la recherche d'un secret bancaire est presque centenaire. Suite à la première guerre mondiale, les nations sont ruinées et pour payer la reconstruction taxent fortement les revenus (le taux marginal de l'impôt sur le revenu passe de 20% à 72% entre 1920 et 1924 en France). Cette répression explique l'évasion fiscale,  de 1920 à 1929 la croissance réelle des comptes offshore augmente de 14% par an en moyenne avec des pics dans les années où la France durcit ses lois sur les grandes fortunes. Les années 50, 60 et 70 sont l'âge d'or du système helvète qui "détient" 1/3 des actions américaines détenu par des étrangers (soit loin devant le RU ou la France qui n'en détient que 7%), signe que la Suisse est devenu un cheval de Troie important. Dans les années 80 de nouveaux paradis fiscaux apparaissent mais ils ne se font pas forcément concurrence, chacun se spécialise dans une activité et ils opèrent en réseaux de façon complémentaire. On achète depuis la Suisse des sicav luxembourgeoise ou des sociétés écrans des îles Caïman.

Les années 90 et 2000 de libéralisation financière et de digitalisation de l'économie ont été des années fastes pour la mobilité discrète des capitaux, mais la crise de 2007 et l'endettement des Etats a relancé la lutte contre l'évasion. Les scandales a répétition de firmes multinationales ayant des taux effectifs de taxation très faibles (Google et le double Irish Dutch sandwich permettant de payer seulement 2% d'impôt sur les sociétés, luxleaks, etc) a aussi sans doute joué en faveur d'une pression politique plus forte sur des pays tels que l'Irlande, la Suisse ou le Luxembourg. Les rentrées fiscales récentes témoignent d'un certain succès de ces politiques. On aurait cependant tord d'être trop optimiste. D'après cette étude de Johannesen et Zucman (2014) une partie des capitaux est en train d'être transférée de la Suisse vers d'autres paradis fiscaux qui n'ont pas signé d'accord d'échange d'information avec la France (dont Hong Kong, Singapour et l'Uruguay).


Johannesen et Zucman, 2014. The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown. American Economic Journal: Economic Policy 2014, 6(1): 65–91

Zucman, G. 2013. Richesse cachée des nations. Seuil.

Zucman, G. 2013. The Missing Wealth of Nations, Are Europe and the U.S. net Debtors or net Creditors?, Quarterly Journal of Economics, 128(3): 1321-1364.

04 mars 2016

No Brentry et la politique migratoire de l'EUxit

"Nous ne coalisons pas les Etats, nous rassemblons les hommes" Jean Monnet.

Vingt deux millions d'euros à Calais pour stopper les migrants vers le RU, 22 millions (?!) cela manque tout de même d'envergure et de vision pour un sommet Franco-Britannique. Mais c'est dans l'air du temps, 300 millions par an en Grèce c'est tout aussi ridicule et inutile, et que dire des discussions avec la Turquie (dirigée de façon peu démocratique) pour repousser plutôt que d'intégrer... L'agglomération des migrants en Allemagne (plus d'1 million) va être un réel problème, alors qu'une dispersion à l'échelle de l'Europe, nécessitant une véritable politique migratoire européenne, était la solution évidente.
La méthode Monnet ne fonctionne plus, les crises successives amenant des réactions en chaîne confortant la construction européenne l'ont affaiblie voire discréditée. Les gains à poursuivre cette intégration sont totalement sous-estimés et les coûts paraissent exorbitant pour beaucoup. La succession désordonnée d'initiatives pays par pays est désolante, elle est pourtant rarement décrite comme telle. Cette incapacité à construire un bien commun est de plus en plus mortifère.

Désolé pour ce post sans références et sans grand contenu, c'est je crois ce qu'on appelle un billet d'humeur, ras le bol de ce nationalisme qui semble indépassable.

29 novembre 2015

T'es cop ou t'es pas cop (de comprendre la proba de 3 degrés de réchauffement)?

Quizz: le Botswana est surnommé:

  1. la ferme de l'Afrique 
  2. la Suisse de l'Afrique 
Il ne pleut presque jamais au Botswana, seulement 1% du territoire est cultivable. L'eau est tellement vénérée que le drapeau est bleu, que la monnaie "Pula" signifie "pluie" et que lorsqu'on pense à des lendemains radieux, on pense à des pluies torrentielles. Pour preuve, en 1966 au moment de l'indépendance le président Seretse Khama s'est écrié "let there be rain!" (Lynas, 2007). Alors, sans surprise, le Botswana n'est pas connu pour son agriculture mais pour ses diamants et pour son système bancaire, l'un des "meilleurs" d'Afrique.
Avec quelques degrés de plus à l'échelle du monde de nombreux pays vont souffrir de sécheresse et tous ne pourront pas être des paradis fiscaux (ou trouver des diamants). Soyons clair, 2 degrés, soit l'objectif de la COP21 à horizon 2100, c'est un climat hostile mais ça reste vivable (enfin pas partout...). Mais peut-on véritablement viser et atteindre précisément 2 degrés? Ne devrait-on pas plutôt avoir des objectifs sur des instruments (harmonisation de taxe, réglementation, marché CO2)? Le problème avec cet objectif de 2 degrés, c'est que la marge d'incertitude est grande, le réchauffement pourrait être bien plus élevé avec le même niveau estimé de pollution. Ces 2-3-4 degrés sont calculés par rapport aux émissions de gaz à effet de serre. Suivant ces émissions (dépendantes donc d'hypothèses sur le PIB, les technologies, le commerce etc) on calcule des probabilités de hausse de températures, en 2100 on devrait être à 700 ppm et en conséquence le scénario de 3 degrés est le plus probable (voir graphique ci-dessous extrait de Wagner et Weitzman, 2015). Mais notez qu'il y à au moins 10% de (mal)chance qu'avec ce même niveau d'émission on tape dans les 6 degrés de réchauffement! Si on fait plus que 700 ppm, la proba des 6 degrés augmente, elle passe à presque 20% avec 800 ppm. 

Il est peu probable qu'on laisse la terre se réchauffer à une telle température. Six degrés c'est un come back au crétacé qui n'est pas vraiment connu pour son abondance en mammifères, alors même avec des progrès techniques (notamment agricoles) la vie risque d'être très très difficile. Les conséquences seront tellement dramatiques qu'elles entraîneront avant ces 6 degrés des changements radicaux concernant les politiques environnementales. 
Source: Soulcié dans Télérama

Hélas, la COP21 ne sera pas un moment historique dans cette direction, discuter du degré de réchauffement, c'est forcément lancer un faux débat. Il faudrait plutôt s'accorder sur un prix du carbone et sur une coordination des politiques environnementales (mais l'échec de Copenhague et les réticences politiques toujours importantes ont pour l'instant reléguer ces objectifs à plus tard). Avec un prix du carbone élevé non seulement des énergies moins polluantes seraient rentables mais il serait aussi profitable de dépolluer. Si l'on songe à la géo-ingénierie (pas les techniques polluantes style émissions de dioxyde de soufre dans l'atmosphère), il est même envisageable de voir se développer des techniques de séquestration efficaces qui permettront de réduire la concentration de CO2 dans l'atmosphère, et donc de réduire les 2-3-4 degrés de réchauffement que nous pourrions atteindre....


Pour aller plus loin, lire l'excellent post sur le blog de l'afse de K Schubert "COP21, prix du carbone, quoi de neuf ?" ainsi que ses références, dont notamment l'article de Nordhaus "Climate Clubs: Overcoming Free-riding in International Climate Policy" et celui de Weitzman "Internalizing the Climate Externality:Can a Uniform Price Commitment Help?" (très facile à lire).

Biblio du post
  • Lynas, Six Degrees, our Future on a Hotter Planet, Harper-Collins.
  • Wagner et Weitzman (2015), Climate Shock, the Economic Consequences of a Hotter Planet. Princeton U Press.

26 novembre 2015

Exclusif, interview de Douglass North

Douglass North (DN) économiste et historien passionné par le fonctionnement des institutions vient de décéder. Cependant, il n'a pas tout à fait quitté ce monde, ses écrits demeurent dans nos pensées. Voici l'interview qu'il avait accepté de nous accorder pour réagir aux suites du printemps arabe, à l'après daech, aux possibilités d'instaurer une démocratie... Bref aux changements institutionnels que l'on attendait et/ou que l'on pourrait attendre.

FC: Cher Douglass, pourriez vous nous décrire votre vision du "changement institutionnel"? Est-ce une vision darwinienne du changement?

DN: Modeling the process of change must derive its inspiration from evolutionary biology but in contrast to Darwinian theory in which the selection mechanisms are not informed by beliefs about the eventual consequences, human evolution is guided by the perceptions of the players in which choices—decisions—are made in the light of these perceptions with the intent of producing outcomes downstream that will reduce the uncertainty of the organizations—political, economic, and social—in pursuit of their goals.

Institutional change is a deliberate process shaped by the perceptions of the actors about the consequences of their actions.
The immediate vehicle by which the actors attempt to shape their environment is by altering the institutional framework in order to improve their (and their organizations’) competitive position.

FC; Pourriez vous décrire en seulement quelques points ce processus (les lecteurs de ce blog étant, en moyenne, des fainéants ;-))?

DN: Let me state five propositions that describe this process:

  1. The continuous interaction between institutions and organizations in the economic setting of scarcity and hence competition is the key to institutional change.
  2. Competition forces organizations continually to invest in new skills and knowledge to survive. The kind of skills and knowledge individuals and their organizations acquire will shape evolving perceptions about opportunities and hence choices that will incrementally alter institutions.
  3. The institutional framework provides the incentive structure that dictates the kinds of skills and knowledge perceived to have the maximum payoff.
  4. Perceptions are derived from the mental constructs of the players.
  5. The economies of scope, complementarities, and network externalities of an institutional matrix make institutional change overwhelmingly incremental and path dependent.
Let Me Expand on These Propositions

  1. Institutions are the rules of the game—both formal rules, informal norms and their enforcement characteristics. Together they define the way the game is played. Organizations are the players. They are made up of groups of individuals held together by some common objectives. Economic organizations are firms, trade unions, cooperatives, etc.; political organizations are political parties, legislatures, regulatory bodies; educational organizations are universities, schools, vocational training centers. The immediate objective of organizations may be profit maximizing (for firms) or improving reelection prospects (for political parties); but the ultimate objective is survival because all organizations live in a world of scarcity and hence competition.
  2. New or altered opportunities may be perceived to be a result of exogenous changes in the external environment which alter relative prices to organizations, or a consequence of endogenous competition among the organizations of the polity and the economy. In either case the ubiquity of competition in the overall economic setting of scarcity induces entrepreneurs and the members of their organizations to invest in skills and knowledge. Whether through learning by doing on the job or the acquisition of formal knowledge, improving the efficiency of the organization relative to that of rivals is the key to survival.
  3. [...] There is no implication in proposition 2 of evolutionary progress or economic growth—only of change. The institutional matrix defines the opportunity set, be it one that makes income redistribution the highest pay-off in an economy or one that provides the highest payoffs to productive activity.While every economy provides a mixed set of incentives for both types of activity, the relative weights (as between redistributive and productive incentives) are crucial factors in the performance of economies. The organizations that come into existence will reflect the payoff structure. More than that, the direction of their investment in skills and knowledge will equally reflect the underlying incentive structure. If the highest rate of return in an economy comes from piracy we can expect that the organizations will invest in skills and knowledge that will make them better pirates.
  4. The key to the choices that individuals make is their perceptions about the payoffs, which are a function of the way the mind interprets the information it receives. [...] The implication of the foregoing paragraph is that individuals from different backgrounds will interpret the same evidence differently; they may, in consequence, make different choices [...] The result is that multiple equilibria are possible due to different choices by agents with identical tastes.

FC: Pouvez vous revenir sur ce processus d'apprentissage qui est central dans cette vision des institutions. 

[...] Humans attempt to reduce that uncertainty (or convert it into risk) by learning. The cumulative learning of a society embodied in language, beliefs, myths, ways of doing things—in short the culture of a society—not only determines societal performance at a moment of time but through the way in which it constrains the choices of the players contributes to the nature of the process through time.
Humans scaffold both the mental models they possess—belief systems—and the external environment—institutions. The focus of our attention, therefore, must be on human learning, on what is learned and how it is shared among the members of a society, on the incremental process by which the beliefs and preferences change through time, and on the way in which they shape the performance of economies through time.

[...] Equally crucial are the policies that we enact to alter the performance of an economy. Even when we have a “correct” understanding of the economy and the (more or less) “correct” theory about its operation, the policies at our disposal are very blunt instruments. They consist of alterations in the formal rules only, when in fact the performance of an economy is an admixture of the formal rules;
the informal norms, and their enforcement characteristics. Changing only the formal rules will produce the desired results only when the informal norms that are complementary to that rule change and enforcement is either perfect or at least consistent with the expectations of those altering the rules.

FC: Certes les règles formelles ne font pas tout...Pensez vous que l'Histoire et les expériences passées peuvent aider à l'émergence d'institutions qui permettent le développement? En bref, quelle est la place du temps dans cette construction?

[...] time is important because it is the dimension in which human learning occurs and there is no implication in the foregoing brief description of the process of learning that suggests that we get it right. Indeed throughout history we have gotten it wrong far more often than we have gotten it right. The rise and fall of communism in the twentieth century is only a recent illustration. It is probably correct that if “reality” stayed constant the feedback from the policies we enacted would gradually lead us to get it right, but change and therefore persistent uncertainty is our lot which guarantees that we will continue to get it wrong at least part of the time.

[...] Let me conclude by talking again about time. [...] it is clear that change is an ongoing continuous affair and that typically our institutional prescriptions reflect the learning from past experience. But there is no guarantee that the past experiences are going to equip us to solve new problems. Indeed an historic dilemma of fundamental importance has been the difficulties of economies shifting from a political economy based on personal exchange to one based on impersonal exchange. An equally wrenching change can be the movement from a “command” economy to a market economy. In both cases the necessity to restructure institutions—both economic and political—has been a major obstacle to development; it still is the major obstacle for third world and transition economies. The belief system that has evolved as a result of the cumulative past experiences of a society has not equipped the members to confront and solve the new problems.

FC; Merci Doug, c'est terriblement d'actualité.

Nota Bene: fake interview obviously, extraits de D North "Institutions and the Performance of Economies over Time" dans le Handbook of New Institutional Economics (ed Ménard et Shirley) de 2005.