Sarkozy s economic policy
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Sarkozy’s Economic Policy. CES, November 1, 2007. Solving Problems. “The French didn’t elect me to comment on their situation. They elected me to solve problems.”. Caveat: Beware of Economic Statistics.

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Sarkozy’s Economic Policy

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Sarkozy s economic policy

Sarkozy’s Economic Policy

CES, November 1, 2007


Solving problems

Solving Problems

  • “The French didn’t elect me to comment on their situation. They elected me to solve problems.”


Caveat beware of economic statistics

Caveat: Beware of Economic Statistics

  • To say that net output to-day is greater, but the price-level lower, than ten years ago or one year ago, is a proposition of a similar character to the statement that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth—a proposition not without meaning and not without interest, but unsuitable as material for the differential calculus.

  • -- John Maynard Keynes


We are a great nation

We are a great nation …

… but we are losing ground


Well being log real gdp per capita

Well-Being: log real gdp per capita


Keeping up with the joneses

Keeping up with the Joneses


Keeping up with joneses 2

Keeping Up with Joneses 2


Trade openness

Trade Openness


Sarkozy s economic policy

FDI flows


Foreign direct investment inflow 06

Foreign Direct Investment Inflow 06


Portfolio investment

Portfolio Investment


Investment

Investment


Why are we losing ground

Why are we losing ground?

We are highly productive ….


Labor productivity trends

Labor Productivity Trends


Tfp growth in services

TFP Growth in Services


But we don t

… but we don’t

  • Work as many hours

  • Work as many years

  • Put as many people to work


Annual hours worked per capita

Annual Hours Worked per capita


Hours worked change over 3 decades

Hours worked change over 3 decades


Sarkozy s economic policy

Current Unemployment


Tax wedge

Tax Wedge


Government spending and debt

Government Spending and Debt


Additional budget from ageing population

Additional Budget from Ageing Population


Growth of public debt

Growth of Public Debt


Policy implications

Policy Implications

  • Acte pour le travail, l’emploi, et le pouvoird’achat (TEPA)

  • Supply Side (Travailler plus)

    • Detaxing of overtime, nip at 35 hr wk

      • Cost 6 bneuros

    • Reform of special regimes, later of general regime

    • Labor market reforms=UNEDIC/ANPE merger, continuing ed

    • Single labor contract

    • Minimum service


Policy implications 2

Policy Implications 2

  • Demand Side (plus incentives)

    • Mortgage Deduction

    • Inheritance tax reduction

    • Fiscal Shield Reduction

    • Total cost: 8 bneuros


Policy implications 3

Policy Implications 3

  • Deficit Reduction

    • Medical copays

    • End special regimes, increase contribution time

    • Social VAT??

  • Purchasing Power

    • Galland, Raffarin, and Royer Laws


Policy implications 4

Policy Implications 4

  • Eurogroup meeting, clashes with Germany, Trichet, Juncker

    • Interest rates

    • Exchange rates

    • Energy market rationalization/nationalization (GDF-Suez, Areva, Gazprom)

    • EADS reorganization

    • Competitivity Clusters

    • University Reform


Purchasing power career incentives

Purchasing Power & Career Incentives


Consumer price index

Consumer Price Index


Income and wealth distribution

Income and Wealth Distribution


Earnings dispersion

Earnings Dispersion


Earnings dispersion1

Earnings Dispersion


Unionization rate

Unionization Rate


Min wage inv rel to union rate

Min Wage inv. Rel. to Union rate


Pct workers paid minimum wage

Pct workers paid minimum wage


Research development

Research & Development


Sarkozy s economic policy

“One can be impressed, I think, without being surprised, but I don’t think one can be surprised without being impressed.”

-- Mme de La Fayette


Extra data

Extra Data


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