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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. 856:
The Common Currency Effect on International Trade: Evidence from an Accidental Monetary Union

I rely on a historical natural experiment to provide, for the first time, a causal estimate of the effect of currency unions on international trade. Since the seminal paper by Rose (2000), a large literature has developed around currencies as a trade...

By Vicquéry Roger
  • Published on 12/31/2021
  • 63 pages
  • EN
  • PDF (2.18 MB)


Publication Working Paper Series no. 855:
The Central Bank, the Treasury, or the Market: Which One Determines the Price Level?

This paper studies a model in which the price level is the outcome of dynamic strategic interactions between a fiscal authority, a monetary authority, and investors in government bonds and reserves. The ''unpleasant monetarist arithmetic'...

By Barthélemy Jean, Mengus Eric, Plantin Guillaume
  • Published on 12/17/2021
  • 65 pages
  • EN
  • PDF (839.36 KB)


Publication Working Paper Series no. 854:
Committed to Flexible Fiscal Rules

We study the impact of fiscal rules on macroeconomic performance. To address the endogeneity of rule adoption, we use data on large, random natural disasters. We document empirically that countries with rules perform significantly better following such...

By Grosse Steffen Christoph, Laura Pagenhardt, Rieth Malte
  • Published on 12/14/2021
  • 46 pages
  • EN
  • PDF (1.7 MB)


Publication Working Paper Series no. 853:
The Reproducibility of Economics Research: A Case Study

Given the importance of reproducibility for the scientific ethos, more and more journals have pushed for transparency of research through data availability policies. If the introduction and implementation of such data policies improve the availability...

By Herbert Sylvérie, Kingi_Hautahi, Stanchi Flavio, Vilhuber Lars
  • Published on 12/10/2021
  • 43 pages
  • EN
  • PDF (1.07 MB)


Publication Working Paper Series no. 852:
Anchoring of Inflation Expectations: Do Inflation Target Formulations Matter?

Inflation target formulations differ across countries and over time. Most widespread are point targets, target ranges, hybrid combinations of the two, or mere definitions of price stability. This paper proposes a novel empirical measure of expectations...

  • Published on 12/09/2021
  • 67 pages
  • EN
  • PDF (5.62 MB)


Publication Working Paper Series no. 851:
Activity shocks and corporate liquidity: the role of trade credit

We show both theoretically and empirically how trade credit financing may magnify the impact of activity shocks on corporate liquidity. Using unique daily data on payment defaults on suppliers in France, we quantify the magnitude of the short-term...

By Bureau Benjamin, Duquerroy Anne, Vinas Frédéric
  • Published on 12/08/2021
  • 57 pages
  • EN
  • PDF (1.28 MB)


Publication Working Paper Series no. 850:
The Political Economy of Currency Unions

How can a currency union be sustained when member states have an exit option? This paper derives how fiscal and monetary policies can ensure the survival of a common currency, if countries want to leave the union. A union-wide central bank can prevent...

By Kai Arvai
  • Published on 12/06/2021
  • 81 pages
  • EN
  • PDF (946.4 KB)


Publication Working Paper Series no. 849:
Capital Controls and Foreign Reserves against External Shocks: Combined or Alone?

Long considered suboptimal, capital controls and FX interventions are now recognized as prudential measures. Yet, whether they should be used in combination remains an open question. Thanks to a rich dataset from 1950, we investigate how the response...

By Cezar Rafaël, Monnet Eric
  • Published on 11/26/2021
  • 36 pages
  • EN
  • PDF (2.25 MB)


Publication Working Paper Series no. 848:
Paying Banks to Lend? Evidence from the Eurosystem's TLTRO and the Euro Area Credit Registry

Since March 2020 the Eurosystem has provided subsidies to Euro-Area banks, via its Targeted Longer-Term Refinancing Operations (TLTRO). Under this program, banks can borrow from the Eurosystem at a rate as low as -1%, conditional on their lending to...

By Da Silva Émilie, Grossmann-Wirth Vincent, Nguyen Benoît, Vari Miklos
  • Published on 11/19/2021
  • 59 pages
  • EN
  • PDF (1.58 MB)


Publication Working Paper Series no. 847:
Can satellite data on air pollution predict industrial production?

The Covid-19 crisis has highlighted innovative high-frequency dataset allowing to measure in real-time the economic impact. In this vein, we explore how satellite data measuring the concentration of nitrogen dioxide (NO2, a pollutant emitted mainly by...

By Bricongne Jean-Charles, Meunier Baptiste, Pical Thomas
  • Published on 11/18/2021
  • 37 pages
  • EN
  • PDF (1.71 MB)


Publication Working Paper Series no. 846:
News from the Frontier: Increased Productivity Dispersion across Firms and Factor Reallocation

Analysing French firms over 1991-2016, we find first that since the beginning of the century, one or two downward significant productivity breaks have occurred in all industries, both at the frontier and for laggard firms, suggesting a decline in the...

By Bouche Paul, Lecat Rémy
  • Published on 11/16/2021
  • 51 pages
  • EN
  • PDF (1.79 MB)


Publication Working Paper Series no. 845:
Overview and inventory of french funds' liquidity management tools: Dynamic view since 2017 and update as at mid-2021

This article presents an update of the analysis of French-domiciled funds’ prospectuses carried out jointly by the Autorité des marchés financiers and the Banque de France (Darpeix, LeMoign, Même, Novakovic, 2020). The first contribution of this new...

By Darpeix Pierre-Emmanuel, Même Nicolas, Mosson Natacha, Novakovic Marko
  • Published on 11/09/2021
  • 35 pages
  • EN
  • PDF (2.95 MB)