Florence Jaumotte's Books

Determinants of Inflation in the Euro Area

The Role of Labor and Product Market Institutions

By: Ms.Florence Jaumotte,Mrs.Hanan Morsy

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Determinants of Inflation in the Euro Area

The Role of Labor and Product Market Institutions

By: Ms.Florence Jaumotte,Mrs.Hanan Morsy

While inflation differentials in a monetary union can be benign, reflecting a catch-up process, or an adjustment mechanism to asymmetric shocks or different business cycles, they may also indicate distortions related to inefficiencies in domestic product and labor markets that amplify or make more persistent the impact of shocks on inflation. The paper examines the determinants of inflation differentials in the euro area, with emphasis on the role of country specific labor and product market institutions. The analysis uses a traditional backward-looking Phillips curve equation and augments it to explore the role of collective bargaining systems, union density, employment protection, and product market regulation. The model is estimated over a panel dataset of 10 euro area countries over the period 1983-2007. Results show that high employment protection, intermediate coordination of collective bargaining, and high union density increase the persistence of inflation. Oil and raw materials price shocks are also more likely to be accommodated by wage increases when the degree of coordination in collective bargaining is intermediate. These results are robust to different estimation methods, model specifications, and outliers. The paper suggests that reforming labor market institutions may improve the functioning of the euro area by reducing the risk of persistent inflation differentials.

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International Monetary Fund

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ISBN 10

1463983646

ISBN 13

9781463983642

Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession

By: Mr.Olivier J Blanchard,Ms.Florence Jaumotte,Mr.Prakash Loungani

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Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession

By: Mr.Olivier J Blanchard,Ms.Florence Jaumotte,Mr.Prakash Loungani

This paper does two things. First, it articulates what are the main implications of theoretical and empirical research for design of labor market policies and labor market institutions. Second, in this light, the paper analyzes the IMF’s labor market recommendations since the beginning of the crisis, both in general, and more specifically in program countries

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International Monetary Fund

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ISBN 10

1484325486

ISBN 13

9781484325483

Economic and Environmental Benefits from International Cooperation on Climate Policies

By: Jean Chateau,Ms. Florence Jaumotte,Gregor Schwerhoff

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Economic and Environmental Benefits from International Cooperation on Climate Policies

By: Jean Chateau,Ms. Florence Jaumotte,Gregor Schwerhoff

This paper discusses and analyzes various international mechanisms to scale up global action on climate mitigation and address the policy gap in this area. Despite the new commitments made at COP 26, there is still an ambition and a policy gap at the global level to keep temperature increases below the 2°C agreed in Paris. Avoiding the worst outcomes of climate change requires an urgent scaling up of climate policies. Recent policy proposals include the idea of common minimum carbon prices, which underlie the IMF’s international carbon price proposal (Parry, Black, and Roaf 2021) and the climate club proposal of the German government. While global carbon prices are not a new idea, the new elements are the use of carbon price floors—which allow countries to do more if they wish—and the differentiation of carbon price floors by level of development. In the absence of international coordination, countries with ambitious climate policies are considering introducing a border carbon adjustment mechanism to prevent domestic producers from being at a competitive disadvantage due to more ambitious domestic climate policies. An interesting question from the global perspective is whether border carbon adjustment would deliver substantial additional emissions reductions or incentivize other countries to join a carbon price floor agreement.

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International Monetary Fund

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ISBN 10

1616358300

ISBN 13

9781616358303

Gen-AI

Artificial Intelligence and the Future of Work

By: Mauro Cazzaniga,Ms. Florence Jaumotte,Longji Li,Mr. Giovanni Melina,Augustus J Panton,Carlo Pizzinelli,Emma J Rockall,Ms. Marina Mendes Tavares

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Gen-AI

Artificial Intelligence and the Future of Work

By: Mauro Cazzaniga,Ms. Florence Jaumotte,Longji Li,Mr. Giovanni Melina,Augustus J Panton,Carlo Pizzinelli,Emma J Rockall,Ms. Marina Mendes Tavares

Artificial Intelligence (AI) has the potential to reshape the global economy, especially in the realm of labor markets. Advanced economies will experience the benefits and pitfalls of AI sooner than emerging market and developing economies, largely due to their employment structure focused on cognitive-intensive roles. There are some consistent patterns concerning AI exposure, with women and college-educated individuals more exposed but also better poised to reap AI benefits, and older workers potentially less able to adapt to the new technology. Labor income inequality may increase if the complementarity between AI and high-income workers is strong, while capital returns will increase wealth inequality. However, if productivity gains are sufficiently large, income levels could surge for most workers. In this evolving landscape, advanced economies and more developed emerging markets need to focus on upgrading regulatory frameworks and supporting labor reallocation, while safeguarding those adversely affected. Emerging market and developing economies should prioritize developing digital infrastructure and digital skills

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ISBN 13

9798400262548

Spillovers from Dollar Appreciation

By: Mr.Julian T Chow,Ms.Florence Jaumotte,Mr.Seok G Park,Ms.Yuanyan S Zhang

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Spillovers from Dollar Appreciation

By: Mr.Julian T Chow,Ms.Florence Jaumotte,Mr.Seok G Park,Ms.Yuanyan S Zhang

The recent strong, sustained appreciation of the U.S. dollar raises questions about possible financial spillover effects for emerging markets and developing countries. This report finds that, unlike past episodes, emerging markets’ vulnerability has improved along a number of dimensions, though some risks persist (as identified in this report).

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ISBN 10

1475541422

ISBN 13

9781475541427

Inequality and Labor Market Institutions

By: Ms.Florence Jaumotte,Ms.Carolina Osorio

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Inequality and Labor Market Institutions

By: Ms.Florence Jaumotte,Ms.Carolina Osorio

The SDN examines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants. The evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality. The results, however, also suggest that a lack of representativeness of unions may be associated with higher inequality. These findings do not necessarily constitute a blanket recommendation for higher unionization and minimum wages, as country-specific circumstances and potential trade-offs with other policy objectives need to be considered. Addressing inequality also requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.

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ISBN 10

1513577255

ISBN 13

9781513577258

Structural Reforms to Accelerate Growth, Ease Policy Trade-offs, and Support the Green Transition in Emerging Market and Developing Economies

By: Mrs. Nina Budina,Mr. Christian H Ebeke,Ms. Florence Jaumotte,Andrea Medici,Augustus J Panton,Marina M. Tavares,Bella Yao

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Structural Reforms to Accelerate Growth, Ease Policy Trade-offs, and Support the Green Transition in Emerging Market and Developing Economies

By: Mrs. Nina Budina,Mr. Christian H Ebeke,Ms. Florence Jaumotte,Andrea Medici,Augustus J Panton,Marina M. Tavares,Bella Yao

In the aftermath of the COVID-19 pandemic, emerging market and developing economies are grappling with economic scarring, social tension, and reduced policy space. Policy actions are already urgently needed to boost growth in the near term and support the ongoing green transition. At the same time, high public debt and persistently high inflation have constrained policy space, posing difficult policy trade-offs. This Staff Discussion Note focuses on emerging market and developing economies and proposes a framework for prioritization, packaging, and sequencing of macrostructural reforms to accelerate growth, alleviate policy trade-offs, and support the green transition. The note shows that prioritizing the removal of the most binding constraints on economic activity, bundling reforms (governance, business deregulation, and external sector reforms), and appropriate sequencing of other reforms (such as labor market and credit sector reforms) can help front-load reform gains. In emerging market and developing economies with large initial structural gaps, the estimated output effects of such a major reform package are sizable—about 4 percent in two years and 8 percent in four years. Achieving higher growth and lower absolute carbon emissions over time requires a well-designed strategy that includes both macrostructural and green reforms.

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ISBN 13

9798400250095

Impact of Migration on Income Levels in Advanced Economies

By: Ms.Florence Jaumotte,Ksenia Koloskova,Ms.Sweta Chaman Saxena

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Impact of Migration on Income Levels in Advanced Economies

By: Ms.Florence Jaumotte,Ksenia Koloskova,Ms.Sweta Chaman Saxena

The recent refugee surge has brought attention to the macro-critical policy issue of migration, including speculations that migration can be an unfavorable phenomenon for the receiving economies. A careful examination of the impact of migration on host economies is thus critical. Focusing on the economic impact, most of the academic discussion has centered on the effect of migration on labor markets and public finances. Much less is known about the long-term impact of immigration on the GDP per capita (or the standard of living) of host economies. This note makes three contributions to estimating this impact: it uses a restricted sample of advanced economies rather than a mixed sample of higher- and lower-income host countries, it examines whether the GDP per capita impact varies for different skill levels of migrants, and it goes beyond the aggregate impact of migration on GDP per capita to examine how broadly gains in this regard are shared across the population. In particular, it examines whether migration impacts the income levels of those both at the top and at the bottom of the earnings distribution, or whether gains are instead concentrated in a small group of high earners. It finds that immigration significantly increases GDP per capita in advanced economies, that both high- and lower-skilled migrants can raise labor productivity, and that an increase in the migrant share benefits the average income per capita of both the bottom 90 percent and the top 10 percent of earners, suggesting the gains from immigration are broadly shared.

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ISBN 10

147554670X

ISBN 13

9781475546705

International Knowledge Spillovers

By: Johannes Eugster,Giang Ho,Ms.Florence Jaumotte,Mr.Roberto Piazza

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International Knowledge Spillovers

By: Johannes Eugster,Giang Ho,Ms.Florence Jaumotte,Mr.Roberto Piazza

How important is foreign knowledge for domestic innovation outcomes? How is this relation shaped by globalization and the attendant intensification of international competition? Our empirical approach extends the previous literature by analyzing a large panel comprising industries in both advanced and emerging economies over the past two decades. We find that barriers to the domestic diffusion of foreign knowledge have fallen significantly for emerging economies. For all countries, and especially for emerging economies, inflows of foreign knowledge have a growing and quantitatively important impact on domestic innovation. Controlling for the amount of domestic R&D, we find evidence that increases in international competitive pressure at the industry level had a positive effect on domestic innovation outcomes

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ISBN 10

1484390601

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9781484390603

The Spanish Labor Market in a Cross-Country Perspective

By: Ms.Florence Jaumotte

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The Spanish Labor Market in a Cross-Country Perspective

By: Ms.Florence Jaumotte

The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the structure of its collective bargaining, which occurs mostly at an intermediate level, and by very high severance payments for permanent workers. Based on a quantitative analysis, the paper shows that moving away from the intermediate level of bargaining would go a long way toward bringing the unemployment rate closer to the EU15 average. The key reform needed to reduce the share of temporary workers is reducing employment protection of permanent workers. Substantially reforming the collective bargaining system and reducing the protection of permanent workers are likely to be highly complementary to secure a substantial reduction in the unemployment rate. The recent 2010 labor market reform attempts to address these issues, although its effects are still to materialize.

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ISBN 10

1455211893

ISBN 13

9781455211890

A Comprehensive Package of Macroeconomic Policy Measures for Implementing China’s Climate Mitigation Strategy

By: Jean Chateau,Ms. Wenjie Chen,Ms. Florence Jaumotte,Karlygash Zhunussova

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A Comprehensive Package of Macroeconomic Policy Measures for Implementing China’s Climate Mitigation Strategy

By: Jean Chateau,Ms. Wenjie Chen,Ms. Florence Jaumotte,Karlygash Zhunussova

This paper presents ways for China to achieve its climate goals while also attain high-quality growth—growth that is balanced, inclusive, and green. Using a dynamic computable general equilibrium model that is calibrated to China, multiple scenarios are considered that incorporate a sequence of layered policies: (i) frontloading mitigation with an earlier emissions peak, (ii) power market reforms, and (iii) economic rebalancing. The results highlight that these policies can significantly contribute to the success of the climate strategy overall, including by lowering the shadow price of carbon as well as the associated mitigation costs. Distribution analysis offers proposals to lessen the impact on vulnerable households.

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ISBN 13

9798400215711

Green Innovation and Diffusion

Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance

By: Ms. Zeina Hasna,Ms. Florence Jaumotte,Jaden Kim,Samuel Pienknagura,Gregor Schwerhoff

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Green Innovation and Diffusion

Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance

By: Ms. Zeina Hasna,Ms. Florence Jaumotte,Jaden Kim,Samuel Pienknagura,Gregor Schwerhoff

Innovation in low-carbon technologies (LCTs), which is essential in the fight against climate change, has slowed in recent years. This Staff Discussion Note shows that a global climate policy strategy can bolster innovation in, and deployment of, LCTs. Countries that expand their climate policy portfolio exhibit higher (1) climate-change-mitigation-patent filings, (2) LCT trade flows, and (3) “green” foreign direct investment flows. Importantly, boosting innovation in, and deployment of, LCTs yields medium-term growth, which mitigates potential costs from climate policies. This note stresses the importance of international policy coordination and cooperation by showcasing evidence of potential climate policy spillovers.

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ISBN 13

9798400256950

The Effect of Tariffs in Global Value Chains

By: Johannes Eugster,Ms. Florence Jaumotte,Ms. Margaux MacDonald,Mr. Roberto Piazza

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The Effect of Tariffs in Global Value Chains

By: Johannes Eugster,Ms. Florence Jaumotte,Ms. Margaux MacDonald,Mr. Roberto Piazza

This paper empirically investigates the impact of tariffs when production is organized in global value chains. Using global input-output matrices, we construct four different tariff measures that capture the direct and indirect exposure to tariffs at different stages of the production chain for a broad set of countries and industries. Our results suggest that tariffs have significant effects on economic outcomes, including on countries and sectors not directly targeted. We find that tariffs higher up and further down in the value chain depress value added, employment, labor productivity and total factor productivity to varying degrees. We find no benefits for the sector that enjoys additional protection, yet there is some evidence of economic activity being diverted, i.e. positive effects on value added and employment from tariffs imposed on competitors. Our paper relates to recent innovations in theoretical gravity models and provides an empirical assessment of possible long-term effects of recent trade tensions.

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ISBN 13

9798400201158

Mitigating Climate Change: Growth-Friendly Policies to Achieve Net Zero Emissions by 2050

By: Ms. Florence Jaumotte,Weifeng Liu,Warwick J. McKibbin

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Mitigating Climate Change: Growth-Friendly Policies to Achieve Net Zero Emissions by 2050

By: Ms. Florence Jaumotte,Weifeng Liu,Warwick J. McKibbin

Background paper prepared for the October 2020 IMF World Economic Outlook. This paper provides a detailed presentation of the simulation results from the October 2020 IMF World Economic Outlook chapter 3 and an additional scenario with carbon pricing only for comparison with the comprehensive policy package where green investments were also included. This paper has greatly benefitted from continuous discussions with Oya Celasun and Benjamin Carton on the design of simulations; contributions from Philip Barrett for part of the simulations; and research support from Jaden Kim. We also received helpful comments from other IMF staff. All remaining errors are ours. McKibbin and Liu acknowledge financial support from the Australian Research Council Centre of Excellence in Population Ageing Research (CE170100005).

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ISBN 10

1513592971

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9781513592978

The Role of Inter- and Intraindustry Trade in Technology Diffusion

By: Ms.Dalia Hakura,Ms.Florence Jaumotte

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The Role of Inter- and Intraindustry Trade in Technology Diffusion

By: Ms.Dalia Hakura,Ms.Florence Jaumotte

Research shows that international trade is an important channel for the transfer of technology. Building on this evidence, this paper examines the effects of inter- and intraindustry trade on technology transfer. The paper develops and tests the hypothesis that intraindustry trade stimulates more technology transfer than interindustry trade because countries are likely to absorb foreign technologies more easily when their imports are from the same sectors as their production and export sectors. The results of empirical tests for 87 countries during 1970–93 support this hypothesis.

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145184784X

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9781451847840

Climate Policy Options: A Comparison of Economic Performance

By: Jean Chateau,Ms. Florence Jaumotte,Gregor Schwerhoff

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Climate Policy Options: A Comparison of Economic Performance

By: Jean Chateau,Ms. Florence Jaumotte,Gregor Schwerhoff

We use a global computable general equilibrium model to compare the economic performance of alternative climate policies along multiple dimensions, including macroeconomic outcomes, energy prices, and trade competitiveness. Carbon pricing which keeps the aggregate cost lower and preserves better the overall competitiveness than across-the-board regulation is the first-best policy, especially in energy intensive and trade exposed industries. Regulations and feebates are good alternatives in the power sector, where technological substitution is possible. Feed-in subsidies, if used alone, are not cost effective.

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ISBN 13

9798400225239

Current Account Imbalances in the Southern Euro Area

By: Piyaporn Sodsriwiboon,Ms.Florence Jaumotte

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Current Account Imbalances in the Southern Euro Area

By: Piyaporn Sodsriwiboon,Ms.Florence Jaumotte

The paper examines the causes, consequences, and potential cures of the large current account deficits in the Southern Euro Area (SEA). These were mostly driven by a decline in private saving rates. But it was the European Monetary Union and the Euro, which enabled these countries to maintain investment rates, and thus run larger current account deficits, by improving their access to the international pool of saving. The paper finds that the deficits in SEA in 2008 were larger than can be explained by fundamentals, though the situation varies substantially across countries. It also finds that although the global financial crisis has started to force some unwinding, the current account deficits are expected to remain high in the medium run, though again with substantial variation across countries. The paper argues these large external deficits pose risks to the economy and therefore matter, even in a currency union, and discusses some policy options to reduce them.

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ISBN 10

1455201227

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9781455201228

Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession

By: Mr.Olivier J. Blanchard,Ms.Florence Jaumotte,Mr.Prakash Loungani

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Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession

By: Mr.Olivier J. Blanchard,Ms.Florence Jaumotte,Mr.Prakash Loungani

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ISBN 10

1484301285

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9781484301289

Inequality and Labor Market Institutions

By: Ms.Florence Jaumotte,Ms.Carolina Osorio

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Inequality and Labor Market Institutions

By: Ms.Florence Jaumotte,Ms.Carolina Osorio

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1513526901

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9781513526904

Inequality and Labor Market Institutions

By: Florence Jaumotte,Carolina Osorio Buitron

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Inequality and Labor Market Institutions

By: Florence Jaumotte,Carolina Osorio Buitron

The paper examines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants. The evidence strongly indicates that de-unionization is associated with rising top earners' income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality. The results, however, also suggest that a lack of representativeness of unions may be associated with higher inequality. These findings do not necessarily constitute a blanket recommendation for higher unionization and minimum wages, as country-specific circumstances and potential trade-offs with other policy objectives need to be considered. Addressing inequality also requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.

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