EconPapers    
Economics at your fingertips  
 

Would a euro's depreciation improve the French economy?

Riccardo Magnani, Luca Piccoli, Martine Carré and Amedeo Spadaro
Additional contact information
Amedeo Spadaro: PSE - Paris School of Economics

CEPN Working Papers from HAL

Abstract: In this paper, we use a Micro-Macro mo del to evaluate the e ects of a euro's depreciation on the French economy, both at the macro and micro level. Our Micro-Macro model consists of a Microsimulation mo del that includes an arithmetical mo del for the French fiscal system and two behavioral mo dels used to simulate the eff ects on consumption b ehavior and lab or supply, and a multisectoral CGE model which simulates the macro economic e ects of a reform or a shock. The integration of the two mo dels is made using an iterative (or sequential) approach. We find that a 10% euro's depreciation stimulates the aggregate demand by increasing exports and reducing imports which increases production and reduces the unemployment rate in the economy. At the individual level, we nd that the macro economic shock reduces poverty and, to a lesser extent, income inequality. In particular, the decrease in the equilibrium wage, determined in the macro mo del, slightly reduces the available income for people who have already a job, while the reduction in the level of unemployment permits to some individuals to find a job, substantially increasing their income and, in many cases, bringing them out of poverty.

Keywords: CGE models; Microsimulation; Exchange rates (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-eec
Date: 2013-05
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01515823
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://hal.archives-ouvertes.fr/hal-01515823/document (application/pdf)

Related works:
Working Paper: Would a Euro's Depreciation Improve the French Economy? (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cepnwp:hal-01515823

Access Statistics for this paper

More papers in CEPN Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2020-01-16
Handle: RePEc:hal:cepnwp:hal-01515823