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See detailGreen Urban Areas
Picard, Pierre M UL; Tran, Thi Thu Huyen UL

E-print/Working paper (2019)

This paper studies the size and location of urban green areas across city spaces. Urban green areas offer amenities that affect residential choices, land consumption and land rent. This paper discusses ... [more ▼]

This paper studies the size and location of urban green areas across city spaces. Urban green areas offer amenities that affect residential choices, land consumption and land rent. This paper discusses the socially optimal sizes and locations of urban green areas within a city and their decentralized allocation through land markets. The main result is that the share of land dedicated to urban green areas is a concave function of the distance to the city center. This result is confirmed by the empirical study of urban structures in the 305 largest EU cities. The importance of urban green areas is finally assessed by a counterfactual analysis, where 50% of urban green areas are removed in each city. [less ▲]

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See detailTrade and Vertical Differentiation
Picard, Pierre M UL; Tampieri, Alessandro

E-print/Working paper (2019)

This paper discusses a trade model with many countries, many goods produced in multiple quality versions, and non-homothetic preferences. It embeds in the same model a series of results that have been ... [more ▼]

This paper discusses a trade model with many countries, many goods produced in multiple quality versions, and non-homothetic preferences. It embeds in the same model a series of results that have been empirically confirmed: high-income countries specialize in the production of high-quality goods and trade more of those. Richer countries purchase more high-quality varieties. They import more high-quality products from the most productive exporters. The paper then studies the impact of productivity and population changes on the quality composition of exports. It finally explains why countries import higher quality goods from more distant countries. [less ▲]

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See detailState‐owned firms and private debt
Picard, Pierre M UL; rusli, ridwan

in Journal of Public Economic Theory (2018), 20(5), 672-702

We study the role of private debt financing in reducing government transfers and information costs in a state‐owned firm. We show that debt contracts allow the government to reduce socially costly ... [more ▼]

We study the role of private debt financing in reducing government transfers and information costs in a state‐owned firm. We show that debt contracts allow the government to reduce socially costly subsidies by letting underperforming state‐owned firms default. When the firm has private information, the government uses debt to reduce the firm's information rents. The option of default and privatization allows the government to stop subsidizing the firm. We identify the conditions under which information costs outweigh privatization costs and a positive debt level benefits governments. [less ▲]

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See detailCommodity taxation and regulatory competition
Zanaj, Skerdilajda UL; Picard, Pierre M UL

in International Tax and Public Finance (2018)

The purpose of this paper is twofold. We first investigate whether product market regulations affect commodity taxation in open-to-trade economies and second we study the strategic interac- tion in ... [more ▼]

The purpose of this paper is twofold. We first investigate whether product market regulations affect commodity taxation in open-to-trade economies and second we study the strategic interac- tion in regulatory measures between trading partner countries. We present a two-country general equilibrium model in which destination-based commodity taxes fi nance public goods, and product market regulation affects both the number of fi rms in the market and product diversity. Based on data for 21 OECD countries over the 1990-2008 period, we provide empirical evidence suggesting that product market regulations are strategic complement policies and that domestic regulations have a negative impact on domestic commodity taxation. [less ▲]

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See detailUrban spatial structure, employment and social ties
Picard, Pierre M UL; zenou, yves

in Journal of Urban Economics (2018), 104(C), 77-93

Consider a model where workers from the majority and the minority group choose both their residential location (geographical space) and the intensity of their social interactions (social space). We ... [more ▼]

Consider a model where workers from the majority and the minority group choose both their residential location (geographical space) and the intensity of their social interactions (social space). We demonstrate under which condition one group resides close to the job center while the other lives far away from it. Even though the two groups have the same characteristics and there is no discrimination in the housing or labor market, we show that the majority group can have a lower unemployment rate whenever it resides close to or far away from the workplace. This is because this group generates a larger and better-quality social network. [less ▲]

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See detailHeterogeneity in Conformism, Firm Selection, and Home Bias
Picard, Pierre M UL; Kichko, Sergey

E-print/Working paper (2018)

This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of ... [more ▼]

This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of conformism becomes more concentrated, the equilibrium average demand falls while product quality rises in a closed economy. In an international trade context, this strengthens the home consumption bias when consumers conform to the behavior of local people. The home bias is mitigated under globalization where individuals tend to conform to people worldwide. The paper also discusses the conditions under which conformism and conspicuousness are reconciled. [less ▲]

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See detailIncome Inequality, Productivity, and International Trade
Picard, Pierre M UL; Hsu, Wen-Tai; Lin, Lu

E-print/Working paper (2018)

This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative ... [more ▼]

This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative relationship between the number and quantity of products consumed by an income group and the earnings of other income groups. It also highlights the negative effect of a mean-preserving spread of income on aggregate productivity through the softening of firms’ selection. This effect is however mitigated in the presence of international trade. In a quantitative analysis, it is shown that an excessively large mean-preserving spread of income may harm the rich as it raises firms’ markups on their purchases. This is contrary to the general belief that income inequality benefits the rich. [less ▲]

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See detailExtensive and intensive margins and exchange rate regimes
Picard, Pierre M UL; hamano, masahige

in Canadian Journal of Economics (2017), 50(3), 804-837

This paper studies the costs and benefits of fixed and flexible exchange rate regimes in the presence of endogenous intensive and extensive margins of trade. The net benefit depends on the levels and ... [more ▼]

This paper studies the costs and benefits of fixed and flexible exchange rate regimes in the presence of endogenous intensive and extensive margins of trade. The net benefit depends on the levels and volatilities of those margins as well as on their correlation with consumers preferences. A fixed exchange rate regime is preferred for sufficiently high labour supply elasticities and lower love for product diversity. Delays between entry and production make fixed exchange rate regimes less attractive. [less ▲]

Detailed reference viewed: 68 (1 UL)
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See detailEquilibrium and first-best city with endogenous exposure to local air pollution from traffic
Schindler, Mirjam UL; Caruso, Geoffrey UL; Picard, Pierre M UL

in Regional Science and Urban Economics (2017), 62

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and ... [more ▼]

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and investigates the feedback effect of endogenous pollution on residential choices. The presence of stronger traffic-induced air pollution exposure reduces the geographical extent and the population of cities. Land rents fall with distance from the city center while population densities may be non-monotonic. Cleaner vehicle technologies reduce pollution exposure everywhere, increase population and density everywhere and do not affect the spatial extent of the city. The paper compares the urban equilibrium with the first-best. The first-best structure is a less expanded city with higher densities at the center and lower densities at the fringe. [less ▲]

Detailed reference viewed: 208 (10 UL)
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See detailUrban Structures with Forward and Backward Linkages
Picard, Pierre M UL; Mossay, Pascal; Tabuchi, Takatoshi

E-print/Working paper (2017)

We study urban structures driven by demand and vertical linkages in the presence of increasing returns to scale. Individuals consume local urban varieties and firms use these varieties to produce a ... [more ▼]

We study urban structures driven by demand and vertical linkages in the presence of increasing returns to scale. Individuals consume local urban varieties and firms use these varieties to produce a national good. We prove the existence of a spatial equilibrium and obtain an invariance result according to which more intense demand or vertical linkages have the same effect on the urban structure as lower commuting costs. Various urban configurations can emerge exhibiting a monocentric, an integrated, a duocentric, or a partially integrated city structure. We discuss the role of commuting and transport costs, intensities of demand and vertical linkages, and urbanization in affecting these patterns. We show that multiple equilibria may arise in equilibrium involving the monocentric city and up to a couple of duocentric and partially integrated structures. [less ▲]

Detailed reference viewed: 23 (0 UL)
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See detailUrban Interactions
Picard, Pierre M UL; Jun Sung, Kim; Patacchini, Eleonora et al

E-print/Working paper (2017)

This paper studies social-tie formation when individuals care about the geographical location of other individuals. In our model, the intensity of social interactions can be chosen at the same time as ... [more ▼]

This paper studies social-tie formation when individuals care about the geographical location of other individuals. In our model, the intensity of social interactions can be chosen at the same time as friends. We characterize the equilibrium in terms of both social interactions and social capital (the value of social interactions offered by each agent) for a general distribution of individuals in the urban geographical space. We show that greater geographical dispersion decreases the incentives to socially interact. We also show that the equilibrium frequency of interactions is lower than the effcient one. Using a unique geo-coded dataset of friendship networks among adolescents in the United States, we estimate the model and validate that agents interact less than the social first best optimum. Our policy analysis suggests that, given the same cost, subsidizing social interactions yields a higher total welfare than subsidizing transportation costs. [less ▲]

Detailed reference viewed: 15 (0 UL)
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See detailEquilibrium and first-best city with endogenous exposure to local air pollution from traffic
Schindler, Mirjam UL; Caruso, Geoffrey UL; Picard, Pierre M UL

E-print/Working paper (2016)

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and ... [more ▼]

Exposure to urban traffic-induced air pollution is a major health concern of cities. This paper analyzes the urban structure when localized pollution exposure arises from commuting traffic and investigates the feedback effect of endogenous pollution on residential choices. The presence of stronger traffic-induced air pollution exposure reduces the geographical extent and the population of cities. Land rents fall with distance from the city center while population densities may be non-monotonic. Cleaner vehicle technologies reduce pollution exposure everywhere, increase population and density everywhere and do not affect the spatial extent of the city. The paper compares the urban equilibrium with the first-best. The first-best structure is a less expanded city with higher densities at the center and lower densities at the fringe. [less ▲]

Detailed reference viewed: 199 (18 UL)
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See detailIncome Effects and Vertical Differentiation in International Trade
Picard, Pierre M UL; Tampieri, Alessandro

E-print/Working paper (2016)

We analyse a trade model with non-homothetic preferences and different quality ver- sions of each product. Income effects drive the quality composition of consumption, pro- duction and trade flows. We ... [more ▼]

We analyse a trade model with non-homothetic preferences and different quality ver- sions of each product. Income effects drive the quality composition of consumption, pro- duction and trade flows. We show that a rise in local population fosters local asymmetric specialization in high-quality production and exports while it harms low income groups. By contrast, an increase in local productivity may generate specialization in high quality production, which in turn may trigger an immiserizing growth process. Weaker compa- rative advantages induce firm to move and make a local productivity improvement more likely to increase production of higher quality goods everywhere. [less ▲]

Detailed reference viewed: 119 (12 UL)
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See detailThe Clean Development Mechanism in a world carbon market
Picard, Pierre M UL; Brèchet, Thierry; Ménière, Yann

in Canadian Journal of Economics (2016), 49(4), 1569-1598

This paper discusses the role of the Clean Development Mechanism (CDM) in 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) in 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. The implications of the presence of non-additional projects are also analyzed. [less ▲]

Detailed reference viewed: 74 (3 UL)
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See detailAirport Congestion and Inefficiency in Slot Allocation
Picard, Pierre M UL; Tampieri, Alessandro UL; Wan, Xi

E-print/Working paper (2015)

This paper analyzes optimal slot allocation in the presence of airport congestion. We model peak and offpeak slots as vertically differentiated products, and congestion limits the number of peak slots ... [more ▼]

This paper analyzes optimal slot allocation in the presence of airport congestion. We model peak and offpeak slots as vertically differentiated products, and congestion limits the number of peak slots that the airport can allocate. Inefficiency emerges when the airport does not exploit all its slots. We show that for a private airport, inefficiency may arise if the airport is not too congested and the per-passenger fee is small enough, while with a public airport it does not emerge. Furthermore the airport, irrespective of its ownership, tends to give different slots to flights with same destination if the underlying market is a duopoly, and a single slot if the underlying market is served by a monopoly. [less ▲]

Detailed reference viewed: 99 (12 UL)
See detailHow location affects friendship interactions
Patacchini, Eleonora; Picard, Pierre M UL; Zenou, Yves

in VOX (2015)

Little is known about how social interactions are affected by geographical distance. This column argues that students tend to interact more with those who are highly central in the network of social ... [more ▼]

Little is known about how social interactions are affected by geographical distance. This column argues that students tend to interact more with those who are highly central in the network of social contacts, and who are geographically closer. Geographical distance is then a hinder to social interactions. [less ▲]

Detailed reference viewed: 112 (12 UL)
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See detailJean Tirole: de la microéconomie à l'économie comportementale
Margherita, Antonia UL; Picard, Pierre M UL

Article for general public (2015)

Detailed reference viewed: 203 (23 UL)
See detailUrban social structure, social capital and spatial proximity
Patacchini, Eleonora; Picard, Pierre M UL; Zenou, Yves

E-print/Working paper (2015)

We develop a theoretical model where the existence and intensity of dyadic contacts depend on location. We show that agents tend to interact more with agents that are highly central in the network of ... [more ▼]

We develop a theoretical model where the existence and intensity of dyadic contacts depend on location. We show that agents tend to interact more with agents that are highly central in the network of social contacts and that are geographically closer. Using a unique geo-coded dataset of friendship networks in the United States, we find evidence consistent with this model. The main empirical challenge, which is the possible endogenous network formation, is tackled by employing a Bayesian methodology that allows to estimate simultaneously network formation and intensity of network contacts. [less ▲]

Detailed reference viewed: 84 (14 UL)
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See detailTrade, economic geography and the choice of product quality
Picard, Pierre M UL

in Regional Science & Urban Economics (2015), 54

The present paper studies the effect of the choice of product quality on trade and location of firms. We discuss a model where consumers have preferences for the quality of a set of differentiated ... [more ▼]

The present paper studies the effect of the choice of product quality on trade and location of firms. We discuss a model where consumers have preferences for the quality of a set of differentiated varieties. Firms do not only develop and sell manufacturing varieties in a monopolistic competitive market but also determine the quality level of their varieties by investing in research and development. We explore the price and quality equilibrium properties when firms are immobile. We then consider a footloose capital model where capital is allocated to the manufacturing firms in the region offering the highest return. We show that the larger region produces varieties of higher quality and that the quality gap increases with larger asymmetries in region sizes and with larger trade costs. Finally, the home market effect is mitigated when firms choose their product quality. [less ▲]

Detailed reference viewed: 132 (5 UL)
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See detailIs a Policy of Free Movemet of Workers Sustainable?
Picard, Pierre M UL; Worrall, Tim

in Scandinavian Journal of Economics (2015)

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: 55 (6 UL)