Calendrier du 04 mars 2021
Macroeconomics Seminar
Du 04/03/2021 de 16:00 à 17:30
Using Zoom
PARODI Francesca (Collegio Carlo Alberto)
Consumption Tax Cuts in a Recession
Consumption taxes are often used across OECD countries as fiscal stimulus tools during recessions. In this paper, I use an estimated structural life-cycle model featuring multiple consumption categories to assess the effectiveness of temporary cuts to the Value Added Tax (VAT) rates on non-durable luxuries and durables as stimulus instruments. I find a 5% increase in consumption of non-durable luxuries in response to a temporary reduction of their VAT rate by 60% and an 80% increase in purchases of durables in response to a temporary cut of their VAT rate by 30%. The larger effect on durable purchases is due to intertemporal substitution and is driven by young and wealthy households bringing forward future durable purchases. Due to the partial irreversibility feature of durables, this effect is dampened if households anticipate higher future aggregate uncertainty.
brown bag Travail et Économie Publique
Du 04/03/2021 de 12:30 à 13:30
Using zoom
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Firm-Led Mobility: Equity-Efficiency Effects of a Novel Mobility Channel
This paper investigates a novel international mobility channel where firms, rather than individuals, initiate the cross-border relocation of workers. Firm-led mobility (FLM) is more substantial in magnitude, and more responsive to shocks than traditional, individual-based migration. It also has radically different efficiency and equity implications for workers, firms and governments. I exploit the unique setting provided by a Europe-wide "posting" scheme, that fully liberalizes international mobility through the supply of cross-border services by companies. Assembling novel and exhaustive administrative data on this continent-wide FLM scheme, and drawing on rich quasi-experimental policy variation, I estimate that staggered FLM liberalization reforms increased overall geographical mobility by 500% without crowding-out other mobility channels. FLM is highly responsive to international cost differentials: I estimate that firm-led mobility flows have an elasticity of 1.6 with respect to wage differentials, twice as much as the standard migration elasticity. I provide suggestive evidence that firms alleviate part of the frictions constraining individual migration, thus rationalizing the magnitude of these effects. I then turn to the unequal distribution of these aggregate gains, both between and within countries. Unlike standard emigration, firm-led mobility redistributed economic activity and tax revenue to sending — mostly low-wage — countries, increasing employment in sending countries by 17% and taxes paid at home by sending firms by 30%, while employment in exposed sectors in receiving countries decreases by 6%. Firm-led mobility is also associated with benefits that mostly accrue to firms instead of workers: using detailed firm-level data, I show that workers' wage rate rise by 10%, while capital-owners increase their profits by 30%, after a firm starts posting workers abroad, suggesting that firms capture 2/3 of the overall mobility surplus.
TOM (Théorie, Organisation et Marchés) Lunch Seminar
Du 04/03/2021 de 12:30 à 13:30
online
QU Xiangyu (Paris 1)
Perfect Altruism Breeds Time Consistency
écrit avec Co-author : Antoine Billot
Public policies are supposed to be determined by maximization of the social lifetime util- ity. This paper focuses on the general process, aggregation rules and unanimity conditions, which makes these policies socially eligible by individuals through their own discount factors and instantaneous utilities. We show that perfect altruism via an adapted form of unanimity is the key condition helping to characterize a time consistent society concerned with intergen- erational fairness in the presence of individuals who are heterogeneous in discount factors as well as in instantaneous utilities. In addition, different intensity levels of altruism are proved to provide different forms of aggregated social discounting and instantaneous utility, these forms giving birth to several lifetime utilities, from the standard exponential discounted function to the quasi-hyperbolic and the k-hyperbolic ones. Moreover, by showing that the degree of so- cial present-bias can be regulated by the choice of the number of periods involving altruism through unanimity, new insights emerge and potentially overturn some of the most standard economic policy recommendations.
Behavior seminar
Du 04/03/2021 de 11:00 à 12:00
on line
DRAGONE Davide (university of Bologna)
Solving the milk addiction puzzle
écrit avec Co-author : Davide Raggi
The milk addiction paradox refers to an empirical finding in which non-addictive commodities such as milk appear to be addictive. This paradoxical result seems more likely when consumption is persistent and with aggregate data. Using both simulated and real data, we show that the milk addiction paradox disappears when estimating the data using an AR(1) linear specification that describes the saddle-path solution of the rational addiction model, instead of the canonical AR(2) model. The AR(1) specification is able to correctly discriminate between rational addiction and simple persistence in the data, to test for the main features of rational addiction, and to produce unbiased estimates of the short and long-run elasticity of demand. These results hold both with
individual and aggregated data, and they imply that the AR(1) model is a better empirical alternative for testing rational addiction than the canonical AR(2) model.
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