emmanuelle VERON - Academia.edu (original) (raw)

Papers by emmanuelle VERON

German Economic Review

Using data from 5474 banks located in 23 OECD countries over the period 2019Q2–2022Q1, we study t... more Using data from 5474 banks located in 23 OECD countries over the period 2019Q2–2022Q1, we study the influence of COVID-19 on bank profitability (before and during the COVID-19 vaccination period). Our results show a negative impact of the COVID-19 pandemic on bank profitability, especially at the onset of the health crisis. In addition, we find that vaccination against COVID-19 had a positive effect on bank profitability, not yet sufficient to compensate for the losses generated at the beginning of the pandemic. Finally, we show that these effects depend on the characteristics of banks (notably size and capital) before vaccination and on the severity of the crisis across countries. Overall, we provide the first evidence of the influence of vaccination on bank behavior in terms of profitability.

Mathematical Social Sciences

Abstract In this paper we investigate the effect of local interaction in a simple urban economics... more Abstract In this paper we investigate the effect of local interaction in a simple urban economics model. Agents interact with others if and only if their interaction benefit outweights their travel cost and therefore meet others only within finite geographic windows. We show that two or more cites may co-exist at the equilibrium provided that they are sufficiently distant. For any interaction surplus function, there exists a unique spatial equilibrium on not too large city supports. The population density within a city is determined by a second order advance-delay differential equation, whose solutions are fully characterized for linear interaction surplus functions. Numerical analyses show that more localized interactions yield flatter population density and land rents over larger extents of the city support. They do not give support to the idea that multiple subcenters can be caused by small and finite geographic windows of interaction.

In the literature, habit formation has been often introduced to enhance the agents' desire to smo... more In the literature, habit formation has been often introduced to enhance the agents' desire to smooth consumption over time. This characteristic was found particularly useful in solving the equity premium puzzle and in matching several stylized facts in growth, and business cycles theory as, for example, the high persistence in the U.S. output volatility. In this paper we propose a definition of habit formation, which is "general" relative to the assumptions on the intensity, persistence, and lag structure, and we unveil two mechanisms which point to the opposite direction: habits may reduce the desire of smoothing consumption over time and then may potentially decrease the power of a model in explaining the previously mentioned facts. More precisely, we propose a complete taxonomy of the rich dynamics which may emerge in an AK model with external addictive habits for all the feasible combinations of the intensity, persistence and lag structure characterizing their formation and we point out to the region in the parameters' space coherent with less smoothing in consumption. An economic explanation of these mechanisms is suggested and the robustness of our results in the case of internal habits verified. Finally and crucially habit formation always reduces the desire of consumption smoothing once the model is calibrated to match the average U.S. output and utility growth rates observed in the data.

externalities in a one-sector model ∗ Hippolyte d’ALBIS

The design of optimal water policies between farmers, municipalities and groundwaterdependent eco... more The design of optimal water policies between farmers, municipalities and groundwaterdependent ecosystem is analysed in a hydro-economic model with physical interactions between a confined aquifer and a shallow aquifer having a natural drainage. Based on the Pecos Basin case study, we analyse the optimal trajectories of the water tables and the water allocation between users and environment flows for the ecosystems. We also explore the consequences for the water manager to use a one-cell model instead of the two-cell model. Our results show the importance to consider hydraulic conductivities for the preservation of groundwater-dependent ecosystems.

LA ROCHELLE-BU (173002101) / SudocSudocFranceF

Lockdown curbs the COVID-19 epidemics but at huge costs. Public debates question its impact compa... more Lockdown curbs the COVID-19 epidemics but at huge costs. Public debates question its impact compared with reliance on individual responsibility. We aim at understanding how rationally chosen self-protective behavior impacts the spread of the epidemics. We want to, first, assess the value of lockdown compared to a counterfactual that incorporates self-protection efforts under unknown disease prevalence; and second, assess how individual behavior modify the epidemic dynamics when mandatory policies are relaxed. We couple an SLIAR model, that includes asymptomatic transmission, with utility maximization: Individuals trade off economic and wellbeing costs from physical distancing with a lower infection risk. Effort depends on risk aversion, perceptions, and the value of contacts. In a Nash equilibrium, individual uncoordinated efforts yield average contact intensity, which drives epidemic transmission. Equilibrium effort differs markedly from constant, stochastic or proportional contact...

A mathematical model is developed to study the spread of the COVID-19 epidemics in France. Data f... more A mathematical model is developed to study the spread of the COVID-19 epidemics in France. Data from French Public Agency of Health are considered to calibrate the model. The spread of the epidemics strongly depends on confinement measures. The aim of the paper is to predict the evolution of the epidemics under various scenarios that could be taken to quit confinement. The spread of the disease and its re-emergence strongly depends on these scenarios.

American Journal of Agricultural Economics, 2019

This paper presents a benchmark stochastic endogenous growth model of an agricultural economy. Pr... more This paper presents a benchmark stochastic endogenous growth model of an agricultural economy. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, safeguarding a greater number of species guarantees better ecosystem services, which in turn ensure lower volatility of agricultural productivity. The optimal conversion/conservation rule is explicitly characterized. Value of biodiversity is considered in its function of hedging against the volatility of agricultural production. Two aspects of biodiversity’s value are examined. We first consider the total value of biodiversity as the welfare gain from biodiversity conservation, that is, the percentage increase in consumption that the society is willing to accept to give up the optimal level of biodiversity in favor of no biodiversity at all. We then consider the insurance value of biodiversity, extending the usual conc...

Journal of Optimization Theory and Applications, 2016

We consider an optimal control problem of underground water contaminated by agricultural pollutio... more We consider an optimal control problem of underground water contaminated by agricultural pollution. The economical inter-temporal objective takes into account the trade off between fertilizer use and cleaning costs. It is constrained by a hydrogeological model for the spread of the pollution in the aquifer. This model consists in a parabolic partial differential equation which is nonlinearly coupled through the dispersion tensor with an elliptic equation, in a three-Communicated by Bernard Dacorogna

Journal of Optimization Theory and Applications, 2017

In this paper, we study an economic model where internal habits play a role. Their formation is d... more In this paper, we study an economic model where internal habits play a role. Their formation is described by a more general functional form than is usually assumed in the literature, because a finite memory effect is allowed. Indeed, the problem becomes the optimal control of a standard ordinary differential equation, with the past of the control entering both the objective function and an inequality constraint. Therefore, the problem is intrinsically infinite dimensional. To solve this model, we apply the dynamic programming approach and we find an explicit solution for the associated Hamilton-Jacobi-Bellman equation, which lets us write the optimal strategies in feedback form. Therefore, we contribute to the existing literature in two ways. Firstly, we fully develop the dynamic programming approach to a type of problem not studied in previous contributions. Secondly, we use this result to unveil the global dynamics of an economy characterized by generic internal habits.

Discussion Papers, 2012

In the literature, habit formation has been often introduced to enhance the agents' desire to smo... more In the literature, habit formation has been often introduced to enhance the agents' desire to smooth consumption over time. This characteristic was found particularly useful in solving the equity premium puzzle and in matching several stylized facts in growth, and business cycles theory as, for example, the high persistence in the U.S. output volatility. In this paper we propose a definition of habit formation, which is "general" relative to the assumptions on the intensity, persistence, and lag structure, and we unveil two mechanisms which point to the opposite direction: habits may reduce the desire of smoothing consumption over time and then may potentially decrease the power of a model in explaining the previously mentioned facts. More precisely, we propose a complete taxonomy of the rich dynamics which may emerge in an AK model with external addictive habits for all the feasible combinations of the intensity, persistence and lag structure characterizing their formation and we point out to the region in the parameters' space coherent with less smoothing in consumption. An economic explanation of these mechanisms is suggested and the robustness of our results in the case of internal habits verified. Finally and crucially habit formation always reduces the desire of consumption smoothing once the model is calibrated to match the average U.S. output and utility growth rates observed in the data.

Journal of Mathematical Economics, 2015

The full-text may be used and/or reproduced, and given to third parties in any format or medium, ... more The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.

In this paper we use a dynamic programming approach to analytically solve an endogenous growth mo... more In this paper we use a dynamic programming approach to analytically solve an endogenous growth model with internal habits where the key parameters describing their formation, namely the intensity, persistence and lag structure (or memory), are kept generic. Then we show that external and internal habits lead to the same closed loop policy function and then to the same (Pareto) optimal equilibrium path of the aggregate variables when the utility function is subtractive nonseparable. The paper uses new theoretical results from those previously developed by the dynamic programming literature applied to optimal control problems with delay and it extends the existing results on the equivalence between models with internal and external habits to the case of finite memory.

Revue économique, 2004

Cet article montre qu'un modèle néo-classique, aux hypothèses habituelles mais pourvu d'une struc... more Cet article montre qu'un modèle néo-classique, aux hypothèses habituelles mais pourvu d'une structure par âge de la population explicite, converge vers son sentier de croissance équilibré avec des oscillations amorties. Il reproduit ainsi un processus de retour à la moyenne avec fluctuations de court terme que l'on observe dans les séries de produit intérieur brut de la plupart des pays de l'OCDE. DEMOGRAPHY AND ECONOMIC FLUCTUATIONS This paper shows that a neoclassical model with standard assumptions but endowed with an explicit age structure of the population, converges to its balanced growth path with damped oscillations. It therefore reproduces a trend-reverting process with short run fluctuations that is displayed by the gross domestic product time series of most OECD countries.

Mathematical Population Studies, 2008

In a model of overlapping generations with a continuum of finitely-lived individuals, the aggrega... more In a model of overlapping generations with a continuum of finitely-lived individuals, the aggregate price dynamics is characterized by a functional differential equation of mixed type. Delays and advances are exogenous when age at retirement is mandatory; they become state-dependent when individuals are allowed to choose their age at retirement. Using the Hopf bifurcation theorem, periodic solutions in the neighborhood of the monetary steady state appearing with a mandatory retirement age vanish with a chosen age.

Journal of Mathematical Economics, 2012

He thanks Professor Kazuo Nishimura and all the staff of the Institute for their kind invitation.

International Economic Review, 2009

In this paper, the dynamic behavior of the capital growth rate is analyzed using an overlapping-g... more In this paper, the dynamic behavior of the capital growth rate is analyzed using an overlapping-generations model with continuous trading and finitely lived agents. Assuming a technology satisfying constant social returns to capital, the equilibrium growth rate is piecewisedefined by functional differential equations with both delayed and advanced terms. The main result concerns the existence of a solution expressed as a series of exponentials, which is shown to crucially depend on the initial wealth distribution among cohorts. Upon existence, the dynamics of the capital growth rate has a saddle-point trajectory that converges to a unique steady-state. Along the transition path, the growth rate exhibits exponentially decreasing oscillations.

German Economic Review

Using data from 5474 banks located in 23 OECD countries over the period 2019Q2–2022Q1, we study t... more Using data from 5474 banks located in 23 OECD countries over the period 2019Q2–2022Q1, we study the influence of COVID-19 on bank profitability (before and during the COVID-19 vaccination period). Our results show a negative impact of the COVID-19 pandemic on bank profitability, especially at the onset of the health crisis. In addition, we find that vaccination against COVID-19 had a positive effect on bank profitability, not yet sufficient to compensate for the losses generated at the beginning of the pandemic. Finally, we show that these effects depend on the characteristics of banks (notably size and capital) before vaccination and on the severity of the crisis across countries. Overall, we provide the first evidence of the influence of vaccination on bank behavior in terms of profitability.

Mathematical Social Sciences

Abstract In this paper we investigate the effect of local interaction in a simple urban economics... more Abstract In this paper we investigate the effect of local interaction in a simple urban economics model. Agents interact with others if and only if their interaction benefit outweights their travel cost and therefore meet others only within finite geographic windows. We show that two or more cites may co-exist at the equilibrium provided that they are sufficiently distant. For any interaction surplus function, there exists a unique spatial equilibrium on not too large city supports. The population density within a city is determined by a second order advance-delay differential equation, whose solutions are fully characterized for linear interaction surplus functions. Numerical analyses show that more localized interactions yield flatter population density and land rents over larger extents of the city support. They do not give support to the idea that multiple subcenters can be caused by small and finite geographic windows of interaction.

In the literature, habit formation has been often introduced to enhance the agents' desire to smo... more In the literature, habit formation has been often introduced to enhance the agents' desire to smooth consumption over time. This characteristic was found particularly useful in solving the equity premium puzzle and in matching several stylized facts in growth, and business cycles theory as, for example, the high persistence in the U.S. output volatility. In this paper we propose a definition of habit formation, which is "general" relative to the assumptions on the intensity, persistence, and lag structure, and we unveil two mechanisms which point to the opposite direction: habits may reduce the desire of smoothing consumption over time and then may potentially decrease the power of a model in explaining the previously mentioned facts. More precisely, we propose a complete taxonomy of the rich dynamics which may emerge in an AK model with external addictive habits for all the feasible combinations of the intensity, persistence and lag structure characterizing their formation and we point out to the region in the parameters' space coherent with less smoothing in consumption. An economic explanation of these mechanisms is suggested and the robustness of our results in the case of internal habits verified. Finally and crucially habit formation always reduces the desire of consumption smoothing once the model is calibrated to match the average U.S. output and utility growth rates observed in the data.

externalities in a one-sector model ∗ Hippolyte d’ALBIS

The design of optimal water policies between farmers, municipalities and groundwaterdependent eco... more The design of optimal water policies between farmers, municipalities and groundwaterdependent ecosystem is analysed in a hydro-economic model with physical interactions between a confined aquifer and a shallow aquifer having a natural drainage. Based on the Pecos Basin case study, we analyse the optimal trajectories of the water tables and the water allocation between users and environment flows for the ecosystems. We also explore the consequences for the water manager to use a one-cell model instead of the two-cell model. Our results show the importance to consider hydraulic conductivities for the preservation of groundwater-dependent ecosystems.

LA ROCHELLE-BU (173002101) / SudocSudocFranceF

Lockdown curbs the COVID-19 epidemics but at huge costs. Public debates question its impact compa... more Lockdown curbs the COVID-19 epidemics but at huge costs. Public debates question its impact compared with reliance on individual responsibility. We aim at understanding how rationally chosen self-protective behavior impacts the spread of the epidemics. We want to, first, assess the value of lockdown compared to a counterfactual that incorporates self-protection efforts under unknown disease prevalence; and second, assess how individual behavior modify the epidemic dynamics when mandatory policies are relaxed. We couple an SLIAR model, that includes asymptomatic transmission, with utility maximization: Individuals trade off economic and wellbeing costs from physical distancing with a lower infection risk. Effort depends on risk aversion, perceptions, and the value of contacts. In a Nash equilibrium, individual uncoordinated efforts yield average contact intensity, which drives epidemic transmission. Equilibrium effort differs markedly from constant, stochastic or proportional contact...

A mathematical model is developed to study the spread of the COVID-19 epidemics in France. Data f... more A mathematical model is developed to study the spread of the COVID-19 epidemics in France. Data from French Public Agency of Health are considered to calibrate the model. The spread of the epidemics strongly depends on confinement measures. The aim of the paper is to predict the evolution of the epidemics under various scenarios that could be taken to quit confinement. The spread of the disease and its re-emergence strongly depends on these scenarios.

American Journal of Agricultural Economics, 2019

This paper presents a benchmark stochastic endogenous growth model of an agricultural economy. Pr... more This paper presents a benchmark stochastic endogenous growth model of an agricultural economy. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, safeguarding a greater number of species guarantees better ecosystem services, which in turn ensure lower volatility of agricultural productivity. The optimal conversion/conservation rule is explicitly characterized. Value of biodiversity is considered in its function of hedging against the volatility of agricultural production. Two aspects of biodiversity’s value are examined. We first consider the total value of biodiversity as the welfare gain from biodiversity conservation, that is, the percentage increase in consumption that the society is willing to accept to give up the optimal level of biodiversity in favor of no biodiversity at all. We then consider the insurance value of biodiversity, extending the usual conc...

Journal of Optimization Theory and Applications, 2016

We consider an optimal control problem of underground water contaminated by agricultural pollutio... more We consider an optimal control problem of underground water contaminated by agricultural pollution. The economical inter-temporal objective takes into account the trade off between fertilizer use and cleaning costs. It is constrained by a hydrogeological model for the spread of the pollution in the aquifer. This model consists in a parabolic partial differential equation which is nonlinearly coupled through the dispersion tensor with an elliptic equation, in a three-Communicated by Bernard Dacorogna

Journal of Optimization Theory and Applications, 2017

In this paper, we study an economic model where internal habits play a role. Their formation is d... more In this paper, we study an economic model where internal habits play a role. Their formation is described by a more general functional form than is usually assumed in the literature, because a finite memory effect is allowed. Indeed, the problem becomes the optimal control of a standard ordinary differential equation, with the past of the control entering both the objective function and an inequality constraint. Therefore, the problem is intrinsically infinite dimensional. To solve this model, we apply the dynamic programming approach and we find an explicit solution for the associated Hamilton-Jacobi-Bellman equation, which lets us write the optimal strategies in feedback form. Therefore, we contribute to the existing literature in two ways. Firstly, we fully develop the dynamic programming approach to a type of problem not studied in previous contributions. Secondly, we use this result to unveil the global dynamics of an economy characterized by generic internal habits.

Discussion Papers, 2012

In the literature, habit formation has been often introduced to enhance the agents' desire to smo... more In the literature, habit formation has been often introduced to enhance the agents' desire to smooth consumption over time. This characteristic was found particularly useful in solving the equity premium puzzle and in matching several stylized facts in growth, and business cycles theory as, for example, the high persistence in the U.S. output volatility. In this paper we propose a definition of habit formation, which is "general" relative to the assumptions on the intensity, persistence, and lag structure, and we unveil two mechanisms which point to the opposite direction: habits may reduce the desire of smoothing consumption over time and then may potentially decrease the power of a model in explaining the previously mentioned facts. More precisely, we propose a complete taxonomy of the rich dynamics which may emerge in an AK model with external addictive habits for all the feasible combinations of the intensity, persistence and lag structure characterizing their formation and we point out to the region in the parameters' space coherent with less smoothing in consumption. An economic explanation of these mechanisms is suggested and the robustness of our results in the case of internal habits verified. Finally and crucially habit formation always reduces the desire of consumption smoothing once the model is calibrated to match the average U.S. output and utility growth rates observed in the data.

Journal of Mathematical Economics, 2015

The full-text may be used and/or reproduced, and given to third parties in any format or medium, ... more The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.

In this paper we use a dynamic programming approach to analytically solve an endogenous growth mo... more In this paper we use a dynamic programming approach to analytically solve an endogenous growth model with internal habits where the key parameters describing their formation, namely the intensity, persistence and lag structure (or memory), are kept generic. Then we show that external and internal habits lead to the same closed loop policy function and then to the same (Pareto) optimal equilibrium path of the aggregate variables when the utility function is subtractive nonseparable. The paper uses new theoretical results from those previously developed by the dynamic programming literature applied to optimal control problems with delay and it extends the existing results on the equivalence between models with internal and external habits to the case of finite memory.

Revue économique, 2004

Cet article montre qu'un modèle néo-classique, aux hypothèses habituelles mais pourvu d'une struc... more Cet article montre qu'un modèle néo-classique, aux hypothèses habituelles mais pourvu d'une structure par âge de la population explicite, converge vers son sentier de croissance équilibré avec des oscillations amorties. Il reproduit ainsi un processus de retour à la moyenne avec fluctuations de court terme que l'on observe dans les séries de produit intérieur brut de la plupart des pays de l'OCDE. DEMOGRAPHY AND ECONOMIC FLUCTUATIONS This paper shows that a neoclassical model with standard assumptions but endowed with an explicit age structure of the population, converges to its balanced growth path with damped oscillations. It therefore reproduces a trend-reverting process with short run fluctuations that is displayed by the gross domestic product time series of most OECD countries.

Mathematical Population Studies, 2008

In a model of overlapping generations with a continuum of finitely-lived individuals, the aggrega... more In a model of overlapping generations with a continuum of finitely-lived individuals, the aggregate price dynamics is characterized by a functional differential equation of mixed type. Delays and advances are exogenous when age at retirement is mandatory; they become state-dependent when individuals are allowed to choose their age at retirement. Using the Hopf bifurcation theorem, periodic solutions in the neighborhood of the monetary steady state appearing with a mandatory retirement age vanish with a chosen age.

Journal of Mathematical Economics, 2012

He thanks Professor Kazuo Nishimura and all the staff of the Institute for their kind invitation.

International Economic Review, 2009

In this paper, the dynamic behavior of the capital growth rate is analyzed using an overlapping-g... more In this paper, the dynamic behavior of the capital growth rate is analyzed using an overlapping-generations model with continuous trading and finitely lived agents. Assuming a technology satisfying constant social returns to capital, the equilibrium growth rate is piecewisedefined by functional differential equations with both delayed and advanced terms. The main result concerns the existence of a solution expressed as a series of exponentials, which is shown to crucially depend on the initial wealth distribution among cohorts. Upon existence, the dynamics of the capital growth rate has a saddle-point trajectory that converges to a unique steady-state. Along the transition path, the growth rate exhibits exponentially decreasing oscillations.