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See detailCurrency Areas and Voluntary Transfers
Picard, Pierre M UL; Worrall, Tim

E-print/Working paper (2015)

This paper discusses the relationship between the formation of a currency area and the use of voluntary fiscal transfers between countries. We show that there is a trade off between the benefits of ... [more ▼]

This paper discusses the relationship between the formation of a currency area and the use of voluntary fiscal transfers between countries. We show that there is a trade off between the benefits of flexible exchange rates and the additional risk sharing benefits of voluntary transfers that can be sustained in a currency area. We show that whether a currency area is beneficial or not will depend on the magnitude of economic parameter values. In particular, we show that in a simple two country model and for a plausible set of economic parameter values, a currency area is optimal. [less ▲]

Detailed reference viewed: 36 (5 UL)
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See detailThe Clean Development Mechanism in a Globalized Carbon Market
Bréchet, Thierry; Ménière, Yann; Picard, Pierre M UL

in Canadian Journal of Economics (2015)

This paper discusses the role of the Clean Development Mechanism (CDM) on the market for carbon quotas and countries’ commitments to reduce their carbon emission levels. We show that the CDM contributes ... [more ▼]

This paper discusses the role of the Clean Development Mechanism (CDM) on the market for carbon quotas and countries’ commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. However, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inappropriate the inclusion of any country that takes no emission abatement commitment. It can even make inefficient a country’s decision to commit to an emission target. [less ▲]

Detailed reference viewed: 69 (17 UL)
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See detailProduct Unbundling in the Travel Industry: The Economics of Airline Bag Fees
Brueckner, Jan K.; Lee, Darin N.; Picard, Pierre M UL et al

in Journal of Economics & Management Strategy (2015), 24(3), 457-484

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a ... [more ▼]

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a bag fee, but that the full-trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of the first prediction. The data also suggest that the average fare falls by less than the bag fee itself so that the full price of a trip rises for passengers who choose to check bags. [less ▲]

Detailed reference viewed: 74 (7 UL)
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See detailUrban Spatial Structure, Employment and Social Ties
Picard, Pierre M UL

Scientific Conference (2014, November)

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group ... [more ▼]

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, we find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, we demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the urban and social space and why this leads to adverse labor-market outcomes in the absence of any discrimination against the minority group. [less ▲]

Detailed reference viewed: 112 (10 UL)
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See detailWhere and When to Invest in Infrastructure
Brueckner, Jan K; Picard, Pierre M UL

in Regional Science & Urban Economics (2014)

This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the ... [more ▼]

This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the investment, doing so under imperfect observability of the investment gains. The two models considered in the paper differ in the source of the imperfection. In the signal model, the imperfection comes from imperfect observability of initial income gains from the investment, while in the option model, it comes from the stochastic nature of the income gains in the second period. In addition to providing the first treatment of this type of problem, the analysis shows that the influences of underlying parameters on whether or not the government waits to invest are similar in the two models. [less ▲]

Detailed reference viewed: 151 (15 UL)
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See detailUrban Spatial Structure, Employment
Picard, Pierre M UL; Zenou, Yves

Presentation (2014, October)

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group ... [more ▼]

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, we find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, we demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the urban and social space and why this leads to adverse labor-market outcomes in the absence of any discrimination against the minority group. [less ▲]

Detailed reference viewed: 51 (10 UL)
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See detailUrban Spatial Structure, Employment and Social Ties
Picard, Pierre M UL; Zenou, Yves

Presentation (2014, October)

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group ... [more ▼]

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, we find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, we demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the urban and social space and why this leads to adverse labor-market outcomes in the absence of any discrimination against the minority group. [less ▲]

Detailed reference viewed: 90 (13 UL)
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See detailUrban Spatial Structure, Employment and Social Ties
Picard, Pierre M UL; Zenou, Yves

E-print/Working paper (2014)

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group ... [more ▼]

We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, we find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, we demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the urban and social space and why this leads to adverse labor-market outcomes in the absence of any discrimination against the minority group. [less ▲]

Detailed reference viewed: 85 (10 UL)
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See detailIs a Policy of Free Movement of Workers Sustainable?
Picard, Pierre M UL; Worrall, Tim

E-print/Working paper (2014)

This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed ... [more ▼]

This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed by the long term benefits that result from better labor market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are impatient and less risk averse workers, when production technologies display decreasing returns and when countries trade a share of their products. [less ▲]

Detailed reference viewed: 88 (17 UL)
See detailSustainable Migration Policies
Picard, Pierre M UL

Presentation (2014, February)

Detailed reference viewed: 74 (15 UL)
See detailCommodity taxation and regulatory competition
Picard, Pierre M UL

Presentation (2014, January)

Detailed reference viewed: 27 (8 UL)
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See detailCommodity taxation and regulatory competition
Moriconi, Simone; Picard, Pierre M UL; Zanaj, Skerdilajda UL

Presentation (2014, January)

This paper studies competition in regulation and commodity taxation between trading countries. We present a general equilibrium model in which destination based consumption taxes finance public goods ... [more ▼]

This paper studies competition in regulation and commodity taxation between trading countries. We present a general equilibrium model in which destination based consumption taxes finance public goods, while regulation of entry determines the number of firms in the markets. We find (i) no strategic interaction in commodity taxes; (ii) regulation leads to lower commodity tax rates if demand for public goods is more sensitive to income than demand for private goods and (iii) regulation policy is a strategically complement instrument if consumers do not over value product diversity. In the empirical part of the paper, we test our predictions using panel data for 21 OECD countries over the period 1990-2008. [less ▲]

Detailed reference viewed: 75 (20 UL)
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See detailTransfer pricing rules, OECD guidelines, and market distortions
Behrens, Kristian; Peralta, Susana; Picard, Pierre M. UL

in Journal of Public Economic Theory (2014)

We study the impact of transfer pricing rules on sales prices, firms' organizational structure, and consumers' utility within a two-country monopolistic competition model featuring source-based profit ... [more ▼]

We study the impact of transfer pricing rules on sales prices, firms' organizational structure, and consumers' utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled a¢ liate; or they can become exporters, i.e., they serve the foreign market by contracting with an independent distributor. Compared to the benchmark cases, where tax authorities are either unable to audit firms or where they are able to audit them perfectly, the use of the OECD's Comparable Uncontrolled Price (CUP) or Cost-Plus (CP) rule distorts firms' output and pricing decisions. The reason is that the comparable arm's length transactions between exporters and distributors, which serve as benchmarks, are not efficient. We show that implementing the CUP or CP rules is detrimental to consumers in the low tax country, yet benefits consumers in the high tax country. [less ▲]

Detailed reference viewed: 112 (10 UL)
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See detailOn the impact of competition on trade and firm location
Okubo, Toshihiro; Picard, Pierre M UL; Thisse, Jacques-François

in Journal of Regional Science (2014)

We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade ... [more ▼]

We study how the level of trade costs and the intensity of competition interact to explain the nature and intensity of trade within a given industry and the location of firms across countries. As trade costs decrease from very high to very low values, the global economy moves from autarky to two-way trade, through one-way trade from the larger to the smaller region. By exploring the intensive and extensive margins of exports, we investigate how the intensity of trade reacts to the degree of competitiveness. Furthermore, when firms are free to change location, they flow from the small to the large country, and the larger country is always a net exported on the manufactured good. Firms located in the big country have a bigger size than those located in the small one. Under one-way trade, the relocation of firms changes their attitude toward export. [less ▲]

Detailed reference viewed: 122 (15 UL)
See detailCommodity taxation and regulatory competition
Picard, Pierre M. UL

Presentation (2013, November)

Detailed reference viewed: 28 (5 UL)
See detailCommodity taxation and regulatory competition
Picard, Pierre M. UL

Presentation (2013, November)

Detailed reference viewed: 25 (6 UL)
See detailSustainable Migration Policies
Picard, Pierre M. UL

Presentation (2013, October)

Detailed reference viewed: 31 (6 UL)
See detailTrade, economic geography and the choice of product quality
Picard, Pierre M. UL

Presentation (2013, October)

Detailed reference viewed: 68 (6 UL)
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See detailProduct Unbundling in the Travel Industry: The Economics of Airline Bag Fees
Brueckner, Jan K.; Lee, Darin N.; Picard, Pierre M UL et al

E-print/Working paper (2013)

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a ... [more ▼]

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a bag fee, but that the full trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of this prediction. The data also suggest that the average fare falls by less than the bag fee itself, so that the full price of a trip rises for passengers who choose to check bags. [less ▲]

Detailed reference viewed: 65 (15 UL)
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Peer Reviewed
See detailPatent Office Governance and Patent System Quality
Picard, Pierre M UL; Van Pottelsberghe, Bruno

in Journal of Public Economics (2013), 104

The present paper discusses the role of quality in patent examination process from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper ... [more ▼]

The present paper discusses the role of quality in patent examination process from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper presents a model in which patent offices set patent fees and the quality level of their examination process. A higher effort in the examination process enhances the patent holders' protection in the judicial system and strengthens the screening of innovations with small inventive steps. We compare the quality of the examination process for various objectives of patent offices. Patent examination quality is the highest in an office maximizing incentives to innovate and the lowest in that maximizing the number of granted patents. A rent-seeking patent office can provide good incentives to innovate if it does not set too high markups on fees. [less ▲]

Detailed reference viewed: 42 (7 UL)