What Matters in Households’ Inflation Expectations?
An important concern in the current wave of inflation is whether agents such as firms and households perceive price changes to be persistent and whether this leads them to change their decisions, for example on consumption. In a recent paper, forthcoming in the Journal of Monetary Economics, we have investigated how households form inflation expectations and how they connect these expectations to their consumption decisions, using French household survey data from 2004 to 2018.
Implicit Guarantees in the Onset of the Euro Area Countries’ Debt Crisis
More than a decade ago, the euro area went through a sovereign debt crisis, in which governments of Southern Europe faced high borrowing costs compared with countries in the north of the euro area. Ultimately, such high borrowing costs led Greece to default on its sovereign debt. In this article, Eric Mengus, Associate Professor of Economics at HEC Paris, explains the euro area sovereign debt crisis and the lessons to take from it, based on his new research, “Asset Purchase Bailouts and Endogenous Implicit Guarantees”, forthcoming in the Journal of International Economics.
How Coaching Children in Social Skills Yields Tremendous Individual and Social Benefits
In 1984, a group of young boys living in poor neighborhoods in Montreal took part in a unique experiment. For two years, they received coaching in social skills like self-confidence and perseverance. A new assessment by HEC Professor of Economics Yann Algan, with Elizabeth Beasley, Sylvana Cote, Jungwee Park, Richard E. Tremblay and Frank Vitaro, now reveals the lifelong benefits of this work, not only in terms of life outcomes for the subjects themselves, but also for society at large.
How Much to Reveal to Persuade a Decision Maker?
How much information one needs to provide to decision makers to respect transparency while keeping its competitive edge? In a new study using a mathematical probabilistic model, HEC Paris professors in Economics and Decision Sciences Frederic Koessler, Marie Laclau and Tristan Tomala, find the optimal equilibrium of information to reveal for companies in a situation where there are competitors.
Human Rights Sanctions Often Fail to Improve Human Rights
Do international sanctions that are imposed with the intention to improve the human rights situation in the targeted country always lead to better human rights? No, according to Professors Armin Steinbach, Jerg Gutmann, Matthias Neuenkirch, and Florian Neumeier, who have studied empirically the legal proportionality test. Their results cast doubt on the lawfulness of many trade and financial sanctions imposed by the US, the EU and other countries – an insight that might extend to many of the sanctions in place today.
Black Swans and Other Challenges to Rational Decision Making
When trying to figure out the outcome of a given situation, or the fallout of a sudden event, is it better to reason by analogies and resort to past experience or to think ahead and apply probabilistic reasoning? Researchers present a new mathematical model on making decisions in uncertain circumstances, which takes into account both modes of reasoning.
Should We Ban Monetary State Financing?
Does monetary financing undermine fiscal discipline, as suggested by legal bans on monetary financing in many jurisdictions? No, according to Professors Armin Steinbach and Oliver Hülsewig, who have studied empirically the impact of unconventional monetary policy throughout the euro crisis. The results cast doubt on categorical prohibitions on monetary financing and call for less concerns in coordinating monetary and fiscal policy -- an insight that might continue to be relevant during COVID-struck economy.
Trust in Scientists Key to Compliance with Pandemic Policies
As the world faces a new COVID-19 variant and infections rise in many parts of the globe, adherence to pandemic restrictions and vaccination policies — considered by scientists to be essential to controlling the pandemic — has been uneven, sometimes openly hostile. A new study sheds light on key factors to instilling citizen trust and compliance with public health measures.
Why Student Debt Relief May Fall Short of Its Good Intentions
As the U.S. staggers beneath the weight of its education debt – a crushing $1.6 trillion in 2020 – there are increasing calls for loan forgiveness. But debt forgiveness plans need to be crafted carefully or they might actually disproportionately favor high-income individuals or specific ethnic groups. A duo of Finance researchers, Sylvain Catherine of Wharton School and Constantine Yannelis of Chicago Booth School of Business, explains how to tailor such policies to better redistribute their benefits. Sylvain Catherine is a HEC Paris PhD alumnus.
Yes, Social Entrepreneurship Training Works
Social entrepreneurship is characterized by a deep commitment to a social cause and the desire to develop new business models with economic, social, and ecological impacts. But can people be trained to become better at social entrepreneurship? HEC Paris Professors Thomas Åstebro and Florian Hoos found that social entrepreneurship training works, but only if carefully designed.