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Working papers

The Working Paper Series showcases research work being conducted at the Banque de France on the development of analytical tools for use in macroeconomic forecasting, monetary policy conduct and the safeguarding of financial stability. The papers do not necessarily reflect the position of the Banque de France or the Eurosystem.


Publication Working Paper Series no. 659:
Unconventional Monetary Policy and Bank Lending Relationships

How to support private lending to firms in recessions is a major open question. This paper uses an unexpected change in the collateral framework of the European Central Bank that reduced the cost of funding loans to a subset of firms in France in 2012,...

By Cahn Christophe, Duquerroy Anne, Mullins William
  • Published on 12/29/2017
  • 77 pages
  • EN
  • PDF (2.48 MB)


Publication Working Paper Series no. 658:
Misallocation Before, During and After the Great Recession

This paper assesses resource misallocation dynamics and its impact on aggregate TFP in the French manufacturing sector between 1990 and 2015. I provide an exact decomposition of allocational inefficiency into three components: labor misallocation,...

By Libert Thibault
  • Published on 12/29/2017
  • EN
  • PDF (1.86 MB)


Publication Working Paper Series no. 657:
Firm Size and the Intensive Margin of Import Demand

We use French microdata to test an ubiquitous property of firm-based models of importing. When firm efficiency is factor neutral and input prices and qualities are common across firms, firm size should have no effect on expenditure shares on the...

By Blaum Joaquin, Lelarge Claire, Peters Michael
  • Published on 12/27/2017
  • 45 pages
  • EN
  • PDF (2.27 MB)


Publication Working Paper Series no. 656:
A Kinked-Demand Theory of Price Rigidity

I provide a microfounded theory for one of the oldest, but so far informal, explanations of price rigidity: the kinked demand curve theory. Assuming that some customers observe at no cost only the price of the store they happen to be at gives rise to a...

  • Published on 12/20/2017
  • 60 pages
  • EN
  • PDF (2.29 MB)


Publication Working Paper Series no. 655:
Inflation Targeting as a Shock Absorber

We study the characteristics of inflation targeting as a shock absorber in response to large shocks in the form of natural disasters for a sample of 76 countries over the period 1970-2015. We find that inflation targeting improves macroeconomic...

By Fratzscher Marcel, Grosse Steffen Christoph, Rieth Malte
  • Published on 12/12/2017
  • 60 pages
  • EN
  • PDF (2.71 MB)


Publication Working Paper Series no. 654:
SMEs’ financing: Divergence across Euro area countries?

This paper studies the divergence/convergence process of European countries as regard the financing behavior of small and medium sized enterprises. Using a firm level and country representative survey, we construct country-time indicators of SMEs’ use...

By Roux Sébastien, Savignac Frédérique
  • Published on 12/12/2017
  • 47 pages
  • EN
  • PDF (3.07 MB)


Publication Working Paper Series no. 653:
Price Dispersion, Private Uncertainty, and Endogenous Nominal Rigidities

This paper shows that when agents learn from prices, large private uncertainty may result from a small amount of heterogeneity. As in a Phelps-Lucas island model, final producers look at the prices of their local inputs to infer aggregate conditions....

By Gaballo Gaetano
  • Published on 12/12/2017
  • EN
  • PDF (3.15 MB)


Publication Working Paper Series no. 652:
Eurosystem’s asset purchases and money market rates

Some Euro area money market rates have been standing below the deposit facility rate since 2015, which coincided with the start of the Eurosystem’s public sector purchase program (PSPP). In this paper, we explore empirically the interactions between...

By Arrata William, Nguyen Benoît, Rahmouni-Rousseau Imène, Vari Miklos
  • Published on 11/24/2017
  • 43 pages
  • EN
  • PDF (2.86 MB)


Publication Working Paper Series no. 651:
A Quantitative Easing Experiment

This paper presents experimental evidence that quantitative easing can be effective in raising bond prices even if bonds and cash are perfect substitutes and the path of interest rates is fixed. Despite knowing the fundamental value of bonds,...

By Penalver Adrian, Akiyama Eizo, Hanaki Nobuyuki, Funaki Yukihiko, Ishikawa Ryuichiro
  • Published on 11/23/2017
  • 36 pages
  • EN
  • PDF (2.61 MB)


Publication Working Paper Series no. 650:
Why are inflation forecasts sticky? Theory and application to France and Germany

This paper proposes a theoretical model of forecasts formation which implies that in presence of information observation and forecasts communication costs, rational professional forecasters might find it optimal not to revise their forecasts...

By Bec Frédérique, Jardet Caroline, Boucekkine Raouf
  • Published on 11/23/2017
  • 28 pages
  • EN
  • PDF (1.99 MB)


Publication Working Paper Series no. 649:
Missing Growth from Creative Destruction

Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of “missing...

By Aghion Philippe, Bergeaud Antonin, Boppart Timo, Klenow Peter, Li Huiyu
  • Published on 11/22/2017
  • 42 pages
  • EN
  • PDF (2.05 MB)


Publication Working Paper Series no. 648:
An analytical framework to calibrate macroprudential policy

This project presents the analytical framework for macroprudential policy (AFMaP) developed at the Financial Stability Directorate of the Banque de France that could be used to calibrate macroprudential instruments and to provide analytical support to...

By Bennani Taryk, Couaillier Cyril, Devulder Antoine, Gabrieli Silvia, Idier Julien, Lopez Pierlauro, Thibaut Piquard, Scalone Valerio
  • Published on 10/26/2017
  • 86 pages
  • EN
  • PDF (3.16 MB)