Research
Job Market Paper:
Monetary Policy and Trade in the Euro Area: The Effect of Market Concentration [Link]
This paper studies how heterogeneity in market concentration and firms' productivity distributions affect monetary policy transmission within a monetary union. I provide empirical evidence that French exporters engage in dynamic price discrimination across Euro area destinations following a monetary policy shock, adjusting prices more significantly for core Euro area countries than for the periphery. This price discrimination is linked to differences in market competition and is partially explained by heterogeneity in firm concentration and productivity distributions across country-sector destinations. The effects remain strong even when using aggregate bilateral trade flows. Additionally, I present evidence of a selection mechanism where unproductive firms exit or enter the market after the shock, with the new cutoff productivity reacting more in markets with more concentrated or skewed distributions. To rationalize these empirical findings, I develop a two-country monetary union model of international trade with nominal wage rigidities and imperfect international risk-sharing. The selection mechanism leads to asymmetric changes in the elasticity of demand across countries with different firm distributions. In line with the empirical analysis, a contractionary monetary policy shock leads to lower markups and import prices, higher output in the more concentrated economy, and a decrease in its bilateral trade balance.
Working papers:
Monetary Policy, Investment, and Market Stabilization
with Luis Fonseca, John Hutchinson and Arthur Saint-Guilhem
This paper examines the impact of both conventional and unconventional monetary policies on firm investment within the Eurozone. Using principal component analysis to construct monetary policy factors, we identify dimensions representing different types of monetary policies, including conventional policy, forward guidance, and quantitative easing. Our analysis employs high-frequency financial data, such as Overnight Index Swaps (OIS) and sovereign rates of various maturities, alongside ORBIS firm-level data from France, Germany, Spain, and Italy, spanning the years 2000 to 2020. By adopting local projection methods, we analyze how these monetary policy factors influence firm investment over time. We find that the effects of conventional monetary policy, forward guidance, and Stance Quantitative Easing vary in intensity but display consistent patterns across the Eurozone. Transmission Quantitative Easing, associated with spread changes between core and peripheral countries, initially exhibits an asymmetric effect but converges in direction after the first period. This observed market-stabilization effect highlights the nuanced impacts of different monetary policy tools on firm investment within the Eurozone.
Gatekeepers, landlords, or superstars? An empirical study of rents in the digital economy [SSRN]
with Bowman Heiden and Nicolas Petit
Whether digital firms earn monopoly profits has been a subject of significant debate within economic literature. This paper seeks to contribute to this discussion by adopting an empirical approach to examine the determinants of profits in digital firms. Economically, profits can be attributed to monopoly, Ricardian, or Schumpeterian rents. To shed light on which types of rents, or combinations thereof, determine profits in digital firms, we develop and empirically test a set of hypotheses. In our empirical analysis, we focus on five major players in the digital industry: Google, Apple, Meta, Amazon, and Microsoft. Our findings challenge the traditional monopoly model as an accurate descriptor of the rents extracted by these tech giants. The study reveals substantial variations in the rent profiles of these companies, emphasizing the importance of considering firm-specific factors. The results underscore the need for further research into the nature of rents in the digital sector. Additionally, the findings call for a cautious approach in antitrust law and regulatory policymaking, as the characteristics of digital firms invite a nuanced understanding of their value creation and value capture mechanisms.
Work in progress:
Monetary Policy, Investment and Productivity Diffusion