I investigate the causes and consequences of the credit distribution, with a emphasis on income inequality. I work on various types of credit, such as household credit, firm credit and municipal credit markets.

Publications

1. Not All Banking Crises are Alike: Assessing their Distributional Impacts relative to Pre-Crisis Credit Gaps, Journal of International Money and Finance, 2025, 150, 103220. (with Clément Mathonnat and Jean-Marc Bédhat Atsebi)

Abstract: The empirical literature on the effects of banking crises on income inequality has yielded mixed findings. In this paper, we aim to reconcile these mixed results by evaluating the effects of banking crises on income inequality in relation to pre-crisis credit gaps. We apply the Local Projections methodology to a yearly panel of 68 banking crises that occurred in 59 countries over the period 1970-2017. Three key results emerge. First, banking crises lead to increased income inequality. Second, only those banking crises preceded by larger credit gaps show a significant increase in income inequality. Third, a deeper contraction in the credit supply and a higher unemployment rate are two channels that could potentially explain why inequality rises more after banking crises with larger pre-crisis credit gaps. These results underscore the importance of macroprudential policies that, as well as limiting the amplitude of the financial cycle and the associated risks of financial crises, could also play a key role in reducing the distributional consequences of banking crises.

2. Structure of Income Inequality and Household Leverage: Cross-Country Causal Evidence, European Economic Review, 2021, 132, 103629 (with Rémi Bazillier and Jérôme Héricourt). See also Lettre du CEPII N°379. In the media: Le Monde, The Conversation

Abstract: How does income inequality and its structure affect credit? Based on various strands of the literature, we hypothesize that rising income inequality should lead to higher household credit at the aggregate level, and that a substantial part of this effect should be driven by the impoverishment of the middle class relative to top-income households. These intu- itions are empirically confirmed by a study based on a country-level dataset over the pe- riod 1970–2017. To identify exogenous variations in inequality, we develop an instrumental variable approach based on two types of country-level instruments: the total number of ratified ILO conventions and factor endowments. Our results show exogenous variations in inequality have a positive impact on household credit: a one-standard-deviation increase in the Gini index generates a 5- to 8- percentage-point expansion in the ratio of house- hold credit to GDP. In addition, the impact is 1.5–1.8 times stronger when the increase in inequality is driven by the income of top earners relative to the middle class rather than by the increase in top earners’ incomes at the expense of the lowest percentiles of the distribution. Those results are robust to various sets of instruments, databases, controls, and variable definitions. They also consistently disappear in countries where financial markets are insufficiently developed.

3. Trilemma, Dilemma and Global Players, Journal of International Money and Finance, 2018, 85(6), 20-39. Supplementary Material

Abstract: This paper investigates the debate between the Mundellian trilemma and the dilemma. Overall, the global financial cycle magnifies the binding effect of financial openness on monetary policy autonomy, and reduces the effectiveness of the floating exchange rate regime in isolating the domestic economy against financial pressures. I provide empirical evidence that the trilemma does not morph into a dilemma. Furthermore, the sensitivity to the global financial cycle depends more on the presence of global investors and global players than on the fluctuations of these financial forces.

In french:

1.  Le fonds de sortie des emprunts toxiques: une alternative au contentieux? Revue d’Economie Politique, 132(2), 313-340 (with Maxime Fajeau and Alexandre Mayol

2. La relation circulaire entre inégalités de revenu et finance: tour d’horizon de la littérature et résultats récents, Revue d’Economie Financière, 2018, 128(1), 127-152 (with Rémi Bazillier and Jérôme Héricourt).

Working Papers

1. The unequal distribution of credit: Is there any role for monetary policy? (Available upon request – with Salima Ouerk) NBB Working Paper

Abstract: Is current monetary policy making the distribution of credit more unequal? Using french household-level data, we document credit volumes along the income distribution. Our analysis centers on assessing the impact of surprises in monetary policy on credit volumes along the income distribution. Expansionary monetary surprises lead to relatively similar reactions from the middle and upper classes, whereas the lower and highest income brackets exhibit distinct dynamics. Controlling for bank decision factors and city dynamics, we attribute these results to individual demand factors.

2. The Political Economy of Green Transition: Evidence from EU Funds in French Municipalities (with Jules Ducept and Antoine Ebeling) Available here: HAL Working Paper

Abstract: How will electoral competition drive the green transition? This paper examines the factors influencing the allocation of EU green funds to French municipalities using a novel dataset covering 980 municipalities across two multi-annual financial frameworks (2007-2013 and 2014-2020). We identify green projects based on the official taxonomy and explore both the economic and political determinants of these green and other projects. While political economy models highlight the role of political alignment between the mayor and higher levels of government, as well as the significance of municipalities with narrow electoral margins, we find distinct determinants for green projects. Political alignment significantly influences the demand for brown projects, but not for green projects. However, a narrow electoral margin increases the demand for both types of projects, especially green ones. We instrument this effect using the number of appeals filed by municipal opposition in French public courts. Our findings show how green voters and political contestability accelerate the green transition.

3. The Dynamic Effect of Climate News on Financial Markets: Evidence from France (with Hamza Bennani) HAL Working Paper

Abstract: We investigate the dynamic response of stock markets to climate-related risks in France. Using a novel dataset of 15,049 newspaper articles from Les Echos, Le Figaro, and Le Monde, we construct climate risk indices, including subindices for physical and transition risks, and relate them to stock market returns of 137 French companies using local projections. We show that climate risk shocks have a negative impact on stock returns, with persistent effects lasting up to two years. Moreover, transition risks exacerbate these negative effects for brown firms more than for green firms. Hence, and contrary to the efficient market hypothesis, our findings suggest a delayed and gradual incorporation of climate-related information by investors, particularly for firms with higher carbon emissions. These results underscore the need to account for dynamic market responses to climate information, particularly in the context of the low-carbon transition.

4. The Role of Wage Bargaining Institutions in the Phillips Curve Flattening (with Francesco de Palma, Jamel Saadaoui and Yann Thommen) BETA Working Paper (2022)

Abstract: We investigate the role of collective wage bargaining institutions on the relationship between wage growth and unemployment, that is, the wage Phillips curve. Based on a labour market model with frictions and collective bargaining, we hypothesize that when the economy deteriorates, wages fall less in parts of the economy covered by collective wage agreements negotiated by trade unions at a centralized level than in economies with bargaining fully decentralized within companies. We move from theory to empirical analysis using regional NUTS-2 data from European countries, which show evidence that the wage Phillips curve flattens when unemployment is high—and gets steeper when the labor market is overheated —, in economies where the sectoral or cross-sectoral levels play a role in the collective wage bargaining. We also find that from a level of centralization intermediate between the company and the sector levels, the wage Phillips curve is twice as flat.

5. Fire Sales and Financial Crises (Available upon request)

Abstract: How does debt maturity structure affect the risk of financial crises? I show how debt maturity can trigger financial crises by introducing debt maturity in a Fisherian deflation model. In particular, using a stock/flow analysis, I find (i) that an excessive reliance on short-term debt exacerbates the risk of financial crises due to fire sales and (ii) that this risk is driven by a rise in the term premium. I confirm these two testable predictions with an empirical study of data from 69 emerging and developing countries from 1970 to 2017. This shows that debt maturity structure is a good early warning indicator of financial crises, which adds information compared with the level of external debt alone.

Work in Progress

1. The Consequences of the Dexia Crisis (with Maxime Fajeau and Alexandre Mayol)
2. The Anatomy of Financial Cycles (with Clément Mathonnat and Maximilien Coussin)
3. Climate Shock Resilience in French Agriculture: Examining the nexus of failure risk and public subsidies (with Rémi Généroso and Clément Nédoncelle)