Labor Economics [Pierre Cahuc, Andre Zylberberg] on *FREE* shipping on qualifying offers. This landmark graduate-level text combines depth. Cahuc Zylberberg – Labor Economics (MIT ). Uploaded by rollolollo. This landmark graduate-level text combines depth and breadth of coverage with recent. Posts about Cahuc & Zylberberg written by Beatrice.

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The book contains interesting descriptions of cauc results of recent empirical work using natural experiments for the purpose of evaluating economic policies in the field of education, tax policy, the reduction of working hours, etc. However, assertions in the book that are at the borderline of reason ultimately make it a caricature that is probably counter-productive. The heart of the book is the claim that economic science produces knowledge to treat social ills zypberberg is on the same scientific level as medicine.

I do not believe this is true. The charge is serious; the point is not to deny zylberbetg contributions of economic experiments but to understand their limitations and to recognize that there are many other approaches in economics natural or controlled experiments constitute only a small percentage of the empirical work in economics. What are the limits of experiments? Zylberbrrg experiments serve only to measure average first-order effects without measuring secondary effects so-called general equilibrium effects that can significantly change the results.

Moreover, experiments are not able to take into account the heterogeneity of the effects on populations, to accurately zyberberg the confidence intervals, etc. It should also be noted that the power to generalize from natural experiments is often weak, as these experiments are by their nature not reproducible. Cahuc and Zylberberg use the study by Mathieu Chemin and Etienne Wasmer comparing the effects of the reduction of working time between Alsace and the whole of France to identify the impact on employment of an additional reduction of 20 zylbeerberg of working time.

This work finds no impact from an additional minute reduction in working time on employment. Can we conclude that the transition to 35 hours, a reduction in working time more than ten times as great, has no impact on employment?

Could there be interaction effects between lowering social contributions and reducing working time? The economist uses data in much more diverse ways than presented by Cahuc and Zylberberg. The book does not discuss laboratory experiments conducted in economics see Levitt and List, Econometric techniques will in all likelihood make more intense use of structural econometrics.

In a recent work Challe et al. Finally, there has been a renewal of economic history and long-series studies. The work of Thomas Piketty is an example that has not gone unnoticed.

“The economic negationism” of Cahuc and Zylberberg: the first-order economy

Other work, including on financial instability especially that by Moritz Schularik and Alan M. Tayloralso uses long time periods to enhance intelligibility. In short, the relationship of data to economics involves multiple methods that can yield conflicting results. This is no mere detail: Here is a concrete illustration of the problem with this approach. The main argument is that it is well known that reducing charges in the neighbourhood of the SMIC has a much bigger impact on employment than for higher wage levels.


This last point is true — but the authors are sidestepping the real issue. The early years of the euro have seen an unprecedented divergence in labour costs and inflation between European countries. But the single currency has made this no longer possible. The question facing economists looking at this situation is whether the euro zone can survive such misalignments see the recent position of Stiglitz on this subject.

The discussion has been focused on establishing internal devaluations in overvalued European countries and boosting wages in undervalued countries. To this end, Germany established a minimum wage, some countries cut the salaries of civil servants, while others lowered their social contributions the CICE tax credit in Francein the knowledge that other fiscal tools are also possible see Emmanuel Farhi, Gita Gopinath and Oleg Itskhoki, The crucial question is therefore: So there is clearly a problem zylberberf one answers these questions based on the impact of reductions of social charges near the SMIC wage level.

This shows zylbberberg danger of basing oneself solely on results measurable by experiments: In the absence of clarification, these remarks become problematic.

Indeed, recent years following the subprime crisis have witnessed a return of Keynesian approaches, as can be seen in recent publications. I would go so far as to say that we are living in a Keynesian moment, with great financial instability zylbefberg massive macroeconomic imbalances Ragot, What then is Keynesianism? It is not, of course, fiscal irresponsibility with ever greater public debt. It is the claim that price movements do not always allow markets to operate normally. Prices move slowly, wages are downwardly rigid, nominal interest rates cannot be very negative, etc.

Because of all this, there are demand externalities that justify public intervention to stabilize the economy. It is the role of the scientist to avoid false debates, not to perpetuate them. The public debate differs greatly from the scientific debate in both purpose and form. Cahuc and Zylberberg want to import the hierarchy of academic debate into the public debate.

There will always be a need for non-academic economists to discuss economic issues. The economic situation zylherberg problems where there is no academic consensus. The business press is full of advice from bank economists, markets, institutions and trade unions, all of whom have legitimate, though non-academic, points of view.

Newspapers like Alternatives Economiquesquoted by Cahuc and Zylberberg, present their views, as does the Financial Timeswhich has a mix of genres.

Pierre Cahuc – Wikipedia

Economists without formal academic credentials play a legitimate role in this debate, even if their opinions differ from those of other researchers with longer CVs.

These contradictions are concretely lived at the OFCE, whose mission is to contribute to the public debate with academic rigor.

This is a very difficult exercise; it requires knowledge of the data, the legal framework, and the academic literature produced by institutions such as the Treasury, the OECD, the IMF, and the European Commission. Knowledge of the economic literature is essential, but it is far from sufficient to make a useful contribution to the public debate. The consensus before the subprime crisis was that financialization and securitization were factors promoting economic stabilization, because of risk allocation, etc.


Microeconomic studies confirmed these intuitions, because they failed to capture the real source cajuc financial instability, which was the correlation of risks in investor portfolios. We now know that the consensus was wrong. Some economists outside the consensus, such as Roubini or Aglietta, and some economics journalists such as The Economistwarned of the destabilizing effects of finance, but they were outside zylbergerg consensus.

“The economic negationism” of Cahuc and Zylberberg: the first-order economy – OFCE le blog

Policy and the public debate is forced to ask: The consensus view among economists is frequently not very informative about the diversity of viewpoints and the risks involved. The public voice of economists outside the consensus is necessary and useful. The first asserts that financial markets are efficient, and the second that financial markets generate excessive volatility.

These publications are useful to public discussion, precisely because of their openness to debate. In science, the cahcu of methods and knowledge about methodology outside the consensus enrich the zylberbberg.

For the same reason, I tended to be against the creation of a new section of heterodox economists, supported by the French association of zyylberberg economists AFEPbecause I see an intellectual cost to the segmentation of the world of economists.

For the same reason, giving a consensus among economists the status of truth Cahuc, Zylberberg, p. The authors castigate ideological criticisms of economics that are unfamiliar with the results or even the practice of economists.

The science of economics has strong political implications, and is therefore always attacked when generates disturbing results. Some criticisms zzylberberg the intellectual debate to the level of personal insults.

A defence of the integrity of economists is welcome, but it requires real learning and modesty to explain what is known and what is not known. On reading the book by Cahuc and Zylberberg, it seems that the authors take up the arms of their opponents: The very title of the book proceeds from great violence. This book is on a slippery slope in the intellectual debate that is heading towards a caricature of debate and verbal abuse.

Every economist involved in the public debate has already been insulted by people who disagree with the results presented for purely ideological reasons. The debate in England on Brexit showed how economists and experts were rejected because of their perceived zylbernerg.

To quote Angus Deaton once again, in a recent interview he did with the newspaper Le Monde:. Matthieu Chemin and Etienne Wasmer, Levitt and John A. Your email address will not be published. To quote Angus Deaton once again, in a recent interview he did with the newspaper Le Monde: Leave a Reply Cancel reply Your email address will not be published.