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 - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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)
Date: 2013-05
Note: View the original document on HAL open archive server: https://hal.science/hal-01515823v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-01515823v1/document (application/pdf)

Related works:
Working Paper: Would a Euro's Depreciation Improve the French Economy? (2017)
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:wpaper:hal-01515823

Access Statistics for this paper

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