Monday, March 6th 2017 –  13:00 – 14:00

Maison des Sciences Économiques, Room 19

 Maison des Sciences Économiques, 106-112 bd de l’Hôpital, 75013 Paris, Métro 5 Campo Formio, bus 57, 67, 27, 83 ou 47

Lise PATUREAU
(Université Dauphine, LEDa)
with  C. POILLY (Université Aix-Marseille)
Addressing International Competitiveness Issues: The role of Pricing-to-Market

Abstract – Echoing recent developments within the Euro area, the paper investigates the role of price-and market-driven policies in enhancing international competitiveness. We investigate the effects of two reforms, a product market deregulation and a fiscal reform that reduces the labor payroll tax rate, on international relative prices and external imbalances. Importantly, we show that the endogenous PTM behavior of firms affects the effectiveness of both reforms on trade competitiveness, with an effect playing in opposite directions. In a long-run perspective, endogenous markups thus reduce the exchange rate depreciation induced by the fiscal reform, whereas amplifying the effectiveness of product market deregulation. Taking into account the transitional dynamics of the reforms substantially modifies the picture though. The labor tax reform proves to be more effective in improving the current account and depreciating the real exchange rate in the aftermath of the reform, even under endogenous markups. This result generalizes to other macroeconomic variables, such as GDP, hours worked and consumption.

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Monday, February 20th 2017 –  13:00 – 14:00

Maison des Sciences Économiques, Room 19

 Maison des Sciences Économiques, 106-112 bd de l’Hôpital, 75013 Paris, Métro 5 Campo Formio, bus 57, 67, 27, 83 ou 47

Juan CARLUCCIO
(Banque de France)
with  A. CUNAT (University of Vienna), H. FADINGER (University of Mannheim) and C. FONS-ROSEN (Universitat Pompeu-Fabra)
Offshoring and Skill-upgrading in French Manufacturing: A Heckscher-Ohlin-Melitz View

Abstract – Using French manufacturing firm-level data for the years 1996 to 2007, we uncover a novel set of stylized facts about offshoring behavior: (i) Low-productivity firms obtain most of their inputs domestically. (ii) Firms with higher productivity offshore skill intensive inputs to skill-abundant countries and are more labor intensive than non-importers in their domestic production. (iii) Firms with even higher productivity also import labor-intensive inputs from labor-abundant countries and are more skill intensive than non-importers. Inspired by these findings, we produce a model in which heterogeneous firms, subject to fixed costs, can offshore intermediate inputs of different skill intensities to countries with different skill premia.Heckscher-Ohlin-like forces operate at the within-industry level, leading to endogenous variation in domestic skill intensities across firms. We provide econometric evidence supporting the factor-proportions channel through which reductions in offshoring costs to labor-abundant
countries have increased firm-level skill intensities of French manufacturers.