Jean Fourastié introduced a meaningful but neglected theory of economic development in a 1949 boo... more Jean Fourastié introduced a meaningful but neglected theory of economic development in a 1949 book. According to Fourastié, technical progress is stronger in some industries (e.g. light bulb production) than in others (e.g. hairdressing). Meanwhile, consumers' demand is only insatiable for products weakly affected by technological improvements. When demand for one product is saturated, additional technological progress leads to a decline in the number of workers in this sector. Therefore, workers have to migrate from activities with high productivity gains to production lines which still enjoy growing demand from consumers but which are less sensitive to technology. Gradually, jobs with low productivity gains dominate, reducing the global potential productivity gains. The tertiary civilization Fourastié expected after 2000 is associated with stagnation, despite continuous technical progress. 1800-2000 was a transitory period of global high productivity gains between two eras of stability. This stability occurs because most of the population work in activities with low productivity gains (agriculture before 1800 and the service industry after 2000). His model precedes and inspired Baumol's analysis and provides a rationale in the " secular stagnation " debate.
We document a sequence of institutional innovations associated with the corporate form over the c... more We document a sequence of institutional innovations associated with the corporate form over the course of several centuries in Toulouse. Shareholding companies that began in the 11th century formally incorporated themselves into two large-scale, widely held firms by 1373. In the years that followed they experienced the economic challenges and conflicts we now recognize as inherent in the separation of ownership and control. Using new and existing archival research, we show how the Toulouse firms developed institutional solutions including tradable shares, limited liability, governing boards, cash payout policies, external audits, shareholder meetings and mechanisms for recapitalization. We examine these developments in the context of institutional economic theory and the received history of the corporation. The Toulouse companies preceded the birth of the Dutch and English East India companies by centuries. Many of the elements of the corporate form attributed to the uncertainty and...
Alors que de 1939 à 1948 les ressources fiscales ne peuvent suivre l'augmentation sans précéd... more Alors que de 1939 à 1948 les ressources fiscales ne peuvent suivre l'augmentation sans précédent des dépenses publiques, le ratio dette/PIB diminue. La gigantesque dette nominale, jamais remboursée, voit sa valeur réelle réduite par l'inflation, alimentée par l'émission monétaire. L'État sort de cette période désendetté, mais la nation est appauvrie : les richesses ont été consommées par le conflit, par l'occupant et par le blocage de l'activité économique.
Economist turned entrepreneur Say was uncertain about his future in 1814 when he was commissioned... more Economist turned entrepreneur Say was uncertain about his future in 1814 when he was commissioned by the French government to document British industrial progress at a critical point of the industrial takeoff. This trip offered the opportunity to observe the economic life of a different country and to deepen his knowledge of the economic consequences of parliamentarism or the Corn Laws. He also developed a specific understanding of the changes occurring in Britain stressing economies of scale, the role of coal for steam, and the horrific situation of the working class. As key causes, he identified British naval domination of the seas and, more surprisingly, the general distortion induced by very heavy taxation. Through his travel, Say also imported new views about education that he disseminated in France before turning himself to the teaching of economics, starting, at forty-eight years of age, an academic career.
In this paper, we revisit the main conclusions found in the study of long term stock prices behav... more In this paper, we revisit the main conclusions found in the study of long term stock prices behavior. We use very accurate monthly time series for the US and the French markets over the period 1871 to 2007 to study the performance of equity investments. We compare modern performance measures (Sharpe, Sortino, VaR, CVaR...) for the reconstructed US and French indexes. We find that the performance of the equity markets is highly volatile depending on the time period considered. We also measured a dramatic increase in correlation between the French and the US market over the period considered. Finally, we find that the US equity market has significantly over performed the French market since 1914, highlighting the US specificity. We conclude that it is not possible to extend the US case to other markets and therefore to use it as a unique predictor for future average stock returns. 1
Most economists believe that strict rent controls deter the production and maintenance of rental ... more Most economists believe that strict rent controls deter the production and maintenance of rental housing. In a Métropolitiques essay, Loïc Bonneval challenged this consensus. Bonneval claimed that France’s severe interwar rent controls had little effect on the profitability of real estate investments. Bonneval based his analysis on a valuable study that he and François Robert made of the archival records of a property management firm in Lyon. Although we admire many aspects of Bonneval’s study, we challenge his economic analysis. Bonneval wrongly focused on the returns that would be available to a buyer of a rent controlled apartment building, not those available to the building’s owner or a prospective builder. As Bonneval and Robert’s own study shows, the real value of apartment buildings in Paris and Lyon fell by 90% between 1913 and 1948. Economists do not need to rethink their opposition to strict rent controls.
De 1719 à 2009, les bulles sur les actions diffèrent par leur ampleur à la hausse mais surtout à ... more De 1719 à 2009, les bulles sur les actions diffèrent par leur ampleur à la hausse mais surtout à la baisse car des cours élevés se maintiennent parfois longtemps. C’est toujours l’ensemble du marché qui est porté à la hausse. Ainsi le facteur technologique ne semble pas déterminant dans la bulle de 1929. Un taux de dividende éloigné de sa moyenne historique indique une bulle. Il permet de prévoir les cours futurs et évolue de manière coordonnée avec les taux d’intérêts à long terme. La théorie autrichienne propose une explication des bulles basée sur une perturbation des taux d’intérêt. Grâce à une hypothèse sur le comportement des taux d’intérêt, cette théorie est testée sur 150 années de données françaises. Between 1719 and 2009, stock bubbles exhibit different patterns according to the magnitude of the rise, but mainly of the fall, since prices may remain high for a long period of time. The phenomenon of rising prices is always observable on the whole market. Thus, the technologi...
The social scientist Jean Fourastié introduced his model of economic development in a book publis... more The social scientist Jean Fourastié introduced his model of economic development in a book published in 1949. He based his analysis on a statistical series he had collected, which established two principles: technical progress is not uniformly distributed across industries (it is higher in manufacturing industry than in services) and human demand for both agricultural and manufactured goods does not grow continuously and may be saturated. These two principles allowed him to propose a model which attempted to predict the high growth observed after World War II (a period that he later called the Glorious Thirty) as well as the following rise of services, leading to a new era of stagnation at the turn of the millennium. His model emphasizes the role of technical progress while growth models focus on capital and labor. Fourastié’s work was initially reviewed by sociological and economic scholars interested in structural changes. As high-level advisor for various French governments and a...
This article assesses the dynamic stock-bond correlations in the absence of inflation by studying... more This article assesses the dynamic stock-bond correlations in the absence of inflation by studying the French market during the Gold Standard. We find that the correlation was higher than what is currently observed, and negatively affected by interest rate volatility.
Jean Fourastié introduced a meaningful but neglected theory of economic development in a 1949 boo... more Jean Fourastié introduced a meaningful but neglected theory of economic development in a 1949 book. According to Fourastié, technical progress is stronger in some industries (e.g. light bulb production) than in others (e.g. hairdressing). Meanwhile, consumers' demand is only insatiable for products weakly affected by technological improvements. When demand for one product is saturated, additional technological progress leads to a decline in the number of workers in this sector. Therefore, workers have to migrate from activities with high productivity gains to production lines which still enjoy growing demand from consumers but which are less sensitive to technology. Gradually, jobs with low productivity gains dominate, reducing the global potential productivity gains. The tertiary civilization Fourastié expected after 2000 is associated with stagnation, despite continuous technical progress. 1800-2000 was a transitory period of global high productivity gains between two eras of stability. This stability occurs because most of the population work in activities with low productivity gains (agriculture before 1800 and the service industry after 2000). His model precedes and inspired Baumol's analysis and provides a rationale in the " secular stagnation " debate.
We document a sequence of institutional innovations associated with the corporate form over the c... more We document a sequence of institutional innovations associated with the corporate form over the course of several centuries in Toulouse. Shareholding companies that began in the 11th century formally incorporated themselves into two large-scale, widely held firms by 1373. In the years that followed they experienced the economic challenges and conflicts we now recognize as inherent in the separation of ownership and control. Using new and existing archival research, we show how the Toulouse firms developed institutional solutions including tradable shares, limited liability, governing boards, cash payout policies, external audits, shareholder meetings and mechanisms for recapitalization. We examine these developments in the context of institutional economic theory and the received history of the corporation. The Toulouse companies preceded the birth of the Dutch and English East India companies by centuries. Many of the elements of the corporate form attributed to the uncertainty and...
Alors que de 1939 à 1948 les ressources fiscales ne peuvent suivre l'augmentation sans précéd... more Alors que de 1939 à 1948 les ressources fiscales ne peuvent suivre l'augmentation sans précédent des dépenses publiques, le ratio dette/PIB diminue. La gigantesque dette nominale, jamais remboursée, voit sa valeur réelle réduite par l'inflation, alimentée par l'émission monétaire. L'État sort de cette période désendetté, mais la nation est appauvrie : les richesses ont été consommées par le conflit, par l'occupant et par le blocage de l'activité économique.
Economist turned entrepreneur Say was uncertain about his future in 1814 when he was commissioned... more Economist turned entrepreneur Say was uncertain about his future in 1814 when he was commissioned by the French government to document British industrial progress at a critical point of the industrial takeoff. This trip offered the opportunity to observe the economic life of a different country and to deepen his knowledge of the economic consequences of parliamentarism or the Corn Laws. He also developed a specific understanding of the changes occurring in Britain stressing economies of scale, the role of coal for steam, and the horrific situation of the working class. As key causes, he identified British naval domination of the seas and, more surprisingly, the general distortion induced by very heavy taxation. Through his travel, Say also imported new views about education that he disseminated in France before turning himself to the teaching of economics, starting, at forty-eight years of age, an academic career.
In this paper, we revisit the main conclusions found in the study of long term stock prices behav... more In this paper, we revisit the main conclusions found in the study of long term stock prices behavior. We use very accurate monthly time series for the US and the French markets over the period 1871 to 2007 to study the performance of equity investments. We compare modern performance measures (Sharpe, Sortino, VaR, CVaR...) for the reconstructed US and French indexes. We find that the performance of the equity markets is highly volatile depending on the time period considered. We also measured a dramatic increase in correlation between the French and the US market over the period considered. Finally, we find that the US equity market has significantly over performed the French market since 1914, highlighting the US specificity. We conclude that it is not possible to extend the US case to other markets and therefore to use it as a unique predictor for future average stock returns. 1
Most economists believe that strict rent controls deter the production and maintenance of rental ... more Most economists believe that strict rent controls deter the production and maintenance of rental housing. In a Métropolitiques essay, Loïc Bonneval challenged this consensus. Bonneval claimed that France’s severe interwar rent controls had little effect on the profitability of real estate investments. Bonneval based his analysis on a valuable study that he and François Robert made of the archival records of a property management firm in Lyon. Although we admire many aspects of Bonneval’s study, we challenge his economic analysis. Bonneval wrongly focused on the returns that would be available to a buyer of a rent controlled apartment building, not those available to the building’s owner or a prospective builder. As Bonneval and Robert’s own study shows, the real value of apartment buildings in Paris and Lyon fell by 90% between 1913 and 1948. Economists do not need to rethink their opposition to strict rent controls.
De 1719 à 2009, les bulles sur les actions diffèrent par leur ampleur à la hausse mais surtout à ... more De 1719 à 2009, les bulles sur les actions diffèrent par leur ampleur à la hausse mais surtout à la baisse car des cours élevés se maintiennent parfois longtemps. C’est toujours l’ensemble du marché qui est porté à la hausse. Ainsi le facteur technologique ne semble pas déterminant dans la bulle de 1929. Un taux de dividende éloigné de sa moyenne historique indique une bulle. Il permet de prévoir les cours futurs et évolue de manière coordonnée avec les taux d’intérêts à long terme. La théorie autrichienne propose une explication des bulles basée sur une perturbation des taux d’intérêt. Grâce à une hypothèse sur le comportement des taux d’intérêt, cette théorie est testée sur 150 années de données françaises. Between 1719 and 2009, stock bubbles exhibit different patterns according to the magnitude of the rise, but mainly of the fall, since prices may remain high for a long period of time. The phenomenon of rising prices is always observable on the whole market. Thus, the technologi...
The social scientist Jean Fourastié introduced his model of economic development in a book publis... more The social scientist Jean Fourastié introduced his model of economic development in a book published in 1949. He based his analysis on a statistical series he had collected, which established two principles: technical progress is not uniformly distributed across industries (it is higher in manufacturing industry than in services) and human demand for both agricultural and manufactured goods does not grow continuously and may be saturated. These two principles allowed him to propose a model which attempted to predict the high growth observed after World War II (a period that he later called the Glorious Thirty) as well as the following rise of services, leading to a new era of stagnation at the turn of the millennium. His model emphasizes the role of technical progress while growth models focus on capital and labor. Fourastié’s work was initially reviewed by sociological and economic scholars interested in structural changes. As high-level advisor for various French governments and a...
This article assesses the dynamic stock-bond correlations in the absence of inflation by studying... more This article assesses the dynamic stock-bond correlations in the absence of inflation by studying the French market during the Gold Standard. We find that the correlation was higher than what is currently observed, and negatively affected by interest rate volatility.
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