Central bankers have recently been under considerable pressure. They responded to the recent surge in inflation with rate hikes that not only raised concerns about economic growth but also increased the cost of issuing new public debt, constraining fiscal policy and potentially making some public debt unsustainable.
By Eric Mengus
Many studies have attempted to estimate the potential effects of technological change on employment and the labor market in France. In March 2024, Emmanuel Macron received the first report from the Committee on Generative Artificial Intelligence, which partly utilizes the recent study by HEC economics professor Antonin Bergeaud. The report concludes that jobs directly replaceable by AI would only represent 5% of the jobs in a country like France, and automation could affect between 10% and 20% of workers, with a high prevalence among managers. In this article, we present the results of these analyses in context.
By Antonin Bergeaud
These days, workers at management consulting, investment banking, accounting, and law firms tend to be as interested in their career paths as they are in their salaries—which often means jumping from one firm to another in pursuit of better opportunities. But their career paths and motivation can be powerfully influenced by what sort of tasks an employer assigns to them. A study by Raphaël Lévy, Associate Professor of Economics and Decision Sciences at HEC Paris, and his colleague Heski Bar-Isaac, Professor in the Joseph L. Rotman School of Management at the University of Toronto, explores how these firms’ task allocation strikes a balance between producing value for the business and offering workers opportunities to prove their talent. Three key findings: • “Lose it to use it”: To attract and motivate employees, employers sometimes sell their jobs as springboards to a great career even outside the firm. • Employees are motivated to perform when granted exposure on the labor market and when assigned to tasks allowing them to showcase their skills. • Different human resources policies coexist: some firms consent to high exposure to their employees to boost their professional advancement, others, more concerned with employee retention, offer flatter career paths.
By Raphaël Levy
A recent study by economists Antonin Bergeaud (HEC Paris), Arthur Guillouzouic (IPP), Emeric Henry (SciencePo and CEPR), and Clément Malgouyres (CNRS and CREST) shows how government spending on academic research spurs private companies with connections to academia to spend more on their own R&D efforts as well. By studying reports produced by academic researchers and with data on labor mobility and public-private R&D partnerships, Bergeaud and his colleagues developed a new way to measure the proximity between academics and business, making us understand its benefits for innovation.
After obtaining their diploma, graduates with a Ph.D. can choose between becoming academics, joining a large company, or founding or joining a start-up. The fraction of Ph.D.s in science and engineering who have started or joined a new firm has declined by approximately 38% in the U.S. since 1997. Entrepreneurship and Innovation Professor Thomas Astebro of HEC Paris, explains this phenomenon, summarizing his article published this summer in the Strategic Entrepreneurship Journal with Serguey Brgauinsky and Yuheng Ding of the University of Maryland.
By Thomas Åstebro
Most decisions have consequences that are uncertain and materialize in the future. Perception of uncertainty may be biased when it regards the future. Indeed, recent research led by Emmanuel Kemel, Professor of Economics and Decision Sciences at HEC Paris and CNRS researcher, and Corina Paraschiv, Professor at LIRAES, has found that people are more likely to take risks if the consequences of their decision aren’t felt immediately.
By Emmanuel Kemel
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.
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.
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.
By Yann Algan
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.
By Tristan Tomala , Marie Laclau , Frédéric Koessler
