• "Monetary policy without interest rates. An evaluation of quantitative controls in France, 1945-1973." JOB MARKET PAPER

1. Many econometric studies use both a narrative approach and an interest rate series to investigate the effects of US monetary policy. The two alternative measures provide very similar conclusions. This similarity in the results is not likely to be found when central banks use numerous instruments, including unconventional quantitative targets. This paper studies the French experience with temporary quantitative controls from 1948 to 1973. First, I explain why a quantitative monetary policy uses by nature many instruments (including controls both on the credit supply and on the money supply) that negate the role of interest rates and why it cannot be measured in the usual way with one single series (or even with an index of several continuous series). Second, I use a narrative approach, relying on various archival records, to build an accurate measure of such a policy. This measure takes into account the duration of restrictive episodes and is treated endogenously in a SVAR. Contractionary monetary policy shocks decreased production and inflation significantly. The impulse response functions show a pattern very similar to standard VAR studies despite the sample, the country, the type of monetary policy and the identication method being all quite dierent. On the contrary, using interest rates as measures of monetary policy does not provide any consistent result. These results offer a revisionist account of postwar monetary policy under Bretton Woods and before the Great Infation. They also suggest that quantities of money and credit can play a greater role than their prices in the adjustment process of the economy.

• "Financing a planned economy. Institutions and credit allocation in the French Golden age of growth (1954-1974)."

1. The role of banking and finance in the Golden Age of European growth (1950-1973) is very little known and widely underestimated. This paper studies the French system of economic planning and investment-based strategy that enhanced medium and long term financing. First, I describe the new institutions that were built after WWII to organize credit allocation. These institutions were designed to solve a coordination problem: to enhance long term investment although it was not privately benecial because too risky for banks. The way of solving this problem relied on rents creation in some specific sectors. I construct a new database that matches the amount of credit in 49 sectors (that had to be registered at the Banque of France) to corporate tax sectoral statistics. I find a signicant positive relationship between 'investment credit' (medium and long term) and the marginal product of capital. The allocation of medium/long term credit managed to favor the allocation of productive capital across sectors. Using GMM estimations,  the effect of 'investment credit' on growth is signicant and positive, contrary to short term credit which did not play any role for investment.

• "The quantities vs. prices tradeoff in monetary policy. An interpretation of the discount window.  (paper available on demand)

1. "Why do central banks sometimes choose to control directly the quantity of credit rather than to changethe interest rates ? This paper states that the choice of monetary policy instrument is determined not just by the nature of the macroeconomic disturbances but by the nature of the interaction between the central bank and the banks. The dilemma prices vs. quantities arises only in a second-best equilibrium. It is primarily a feature of discount window policy. I build a simple positive model that derives under which conditions a central bank has incentives to ration directly credit at below market rates. Asymmetries of information between banks and firms (imperfect financial markets) and a monopoly of the central bank on banks renancing are crucial to this result. The model also offers a new interpretation of expansive policy when the interest rate does not play any role (full allotment).The opposite case is when the interest rate is used as a screening device (real bills doctrine). Finally, this theoretical framework makes clear that, in a imperfect information context, quantitative second-best monetary policy always creates rents. The model helps to explain why central banks in history and insome developing countries today still use many quantitative instruments and why it is associated withdiscount policy. It also provides a new account for the reaction of central banks during crisis.

• Instituer le crédit en France, de la Libération aux années 1980. (Paper available on demand)

1. Cet article propose une analyse institutionnelle de la politique monétaire française de la fin de la Seconde Guerre mondiale à la libéralisation financière des années 1980. Plutôt que d’étudier la Banque de France comme une institution, nous considérons la politique monétaire dans le cadre plus général de l’institutionnalisation du crédit, c'est-à-dire l’ensemble des normes, lois, pratiques et assemblées représentatives qui établissent le crédit sous une forme nouvelle après la Seconde Guerre mondiale. Ce processus, nommé « nationalisation du crédit » par les contemporains, était beaucoup plus large que la seule nationalisation juridique de la Banque de France et des grandes banque de dépôts. Notre perspective permet d’abord de comprendre le contrôle direct du crédit, instrument principal de la politique monétaire pendant cette période, comme une composante essentielle de l’institution du crédit en ce qu’il la protège contre ses propres excès tout en ne contredisant pas ses principaux objectifs. Elle permet ensuite, en retour, de saisir la portée de la désinstitutionnalisation progressive du crédit, dont l’aboutissement sera la loi de libéralisation de 1984, et qui peut s’interpréter comme un processus de désencastrement - au sens de Karl Polanyi et de John Ruggie- qui a réduit considérablement la capacité qu’avaient certaines préoccupations sociales et politiques d’influencer l’organisation et l’allocation du crédit en France.

• This article (in French) aims to provide an institutional analysis of French monetary policy from the end of WWII to the financial liberalization of the 80s. Rather than merely considering the Banque de France as an institution, I study monetary policy in a broad perspective: the institutionalisation of credit, that is the set of laws, norms, social practices and representative committees that established credit in a new way starting 1945. This process, named “nationalization of credit” at that time, was much wider than the strict nationalization of the Central bank and commercial banks. The perspective I follow brings new considerations about direct quantitative credit control which was the main instrument of monetary policy along the period. Indeed, credit control episodes were an essential component of the “nationalization” of credit in the sense that they protected it against itself without damaging the main objectives of the policy. Then, this perspective also sheds light on the “desinstitutionalisation” of credit whose turning point is the 1984 law. Following Karl Polanyi and John Ruggie, this process is interpreted as a process of disembeddedness, which has considerably reduced the capacity of social and political considerations to influence the organisation and allocation of credit.

Research in progress

• "French monetary policy under the Bretton Woods system." 

1. The internal and external stability of the Franc were the main objectives of the Bank of France under Bretton Woods. Contractionary monetary policy was adopted several times in order to stabilize the balance of payments, sometimes under pressure of the IMF. Devaluations were always preceded by such a restrictive episode. It was costly in terms of production, welfare and political stability. This paper shows how this background determined the position of French president De Gaulle in the 1960s when he attacked the dollar and called for a return to the gold standard. Relying on Bank of France's archives, I study the functioning and the procedures of the Gold Pool and show how it was undermined by French policymakers since it began. I draw comparisons with other countries to understand why they did not endorse the French attack. Many elements suggest that sound domestic monetary policies in Western Europe were crucial to ensure the longevity of the Bretton Woods system despite its intrinsic instability (Triffin dilemma).   

• Monetary policy and the Great inflation: a comparison between France and West Germany"  slides Great Inflation

1. From 1974 to 1982, West Germany experienced an average ination rate of 4.5% while France, as many other countries, had a double digit average infation rate (10.5%). Starting 1973, France started to target money supply growth and choose an average target of 13% over the period. The German average target was 7% while the GDP growth rate was similar. Moreover, during the 1950s and 1960s, France had reached the stabilization of the price level several times achieving a growth rate of M2 around 7%. I construct a simple dynamic model of the French economy and run a counterfactual. France would have achieved a lower ination rate if it had chosen the German target, even when we account for international supply shocks. I argue that it reflected different views of the unemployment-ination tradeoff and different balances of political power in both countries, notably the strength of the banking lobby. The unemployment rate was also much higher in France. Estimations of French monetary policy reaction function (using a new measure of policy tightness based on firms and households surveys) as well as narrative evidence confirm that unemployment became the major determinant of monetary policy starting 1975.

• French monetary policy under the Gold standard, 1880-1914. A FAVAR approach." (with GuillaumeBazot)

1. The macroeconomic impact of domestic monetary policy under the gold standard is difficult to estimate. First because of the diffculties of obtaining an accurate measure of monetary policy. Contrary to the Bank of England, the Bank of France kept a very low and stable discount rate but used the volume of discount and rediscount as its main instrument. Second because of the lack of monthly or quarterly data on output. In order to address the first problem, we identify exogenous moves in the volume of discount using a narrative approach. The second problem is addressed constructing new monthly and quarterly index of French economic activity over the period using a dynamic factor approach. We also investigate in what extent the policy decisions were shaped by the external constraint of the gold parity and othercentral banks policies.

• Old stuff: 

« Inflation targeting et paramètres financiers : pourquoi les banques centrales manquent-elles leur cible ? ». Mémoire de Master 2 (sous la direction de Philippe Aghion), 2007.

 «Géographie financière et effets de place aux USA » Lettre financière, Agence financière, DGTPE, Ministère de l'Economie et des Finances, août 2006.

"Sur Sen et le théorème d'impossibilité du libéral parétien", document de travail 2006