Une erreur de politique économique: La loi des quarante heures de 1936

Asselain, Jean-Charles

doi:10.2307/3500655

Cited by 5 publications

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“…The Matignon agreements of June 7, 1936 raised private‐sector wages by 7–15% (Sauvy ). Almost immediately thereafter, the government passed a series of laws codifying collective bargaining rights, granting workers 2 weeks of paid vacation, and reducing the work week from 48 to 40 hours, all while holding weekly pay constant (Asselain , Bernard and Dubief ). The 40‐hour week restriction was implemented only gradually, a fact we exploit in our econometric work below.…”

Section: The Great Depression and The Popular Frontmentioning

confidence: 99%

Supply‐Side Policies in the Depression: Evidence from France

Cohen-Setton¹,

Hausman²,

Wieland³

2017

J of Money Credit Banking

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The effects of supply‐side policies in depressed economies are controversial. We shed light on this debate using evidence from France in the 1930s. In 1936, France departed from the gold standard and implemented mandatory wage increases and hours restrictions. Deflation ended but output stagnated. We present time‐series and cross‐sectional evidence that these supply‐side policies, in particular the 40‐hour law, contributed to French stagflation. These results are inconsistent both with the standard one‐sector New Keynesian model and with a medium scale, multisector model calibrated to match our cross‐sectional estimates. We conclude that the New Keynesian model is a poor guide to the effects of supply‐side shocks in depressed economies.

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Section: The Great Depression and The Popular Frontmentioning

confidence: 99%

Supply‐Side Policies in the Depression: Evidence from France

Cohen-Setton¹,

Hausman²,

Wieland³

2017

J of Money Credit Banking

View full text Add to dashboard Cite

show abstract

“…The Matignon agreements of June 7, 1936 raised private sector wages by 7% to 15% (Sauvy, 1984). Almost immediately thereafter, the government passed a series of laws codifying collective bargaining rights, granting workers two weeks of paid vacation, and reducing the work week from 48 to 40 hours, all while holding weekly pay constant (Bernard and Dubief, 1988;Asselain, 1974).…”

Section: The Great Depression and The Popular Frontmentioning

confidence: 99%

Supply-Side Policies in the Depression: Evidence from France

2017

View full text Add to dashboard Cite

The effects of supply-side policies in depressed economies are controversial. We shed light on this debate using evidence from France in the 1930s. In 1936, France departed from the gold standard and implemented mandatory wage increases and hours restrictions. Deflation ended but output stagnated. We present time-series and cross-sectional evidence that these supply-side policies, in particular the 40-hour law, contributed to French stagflation. These results are inconsistent both with the standard one-sector new Keynesian model and with a medium scale, multi-sector model calibrated to match our cross-sectional estimates. We conclude that the new Keynesian model is a poor guide to the effects of supply-side shocks in depressed economies. 2 librium effects. General equilibrium effects are the basis for the new Keynesian model's prediction that an hours restriction is expansionary with fixed nominal interest rates. To assess whether such general-equilibrium effects are plausible, we follow Nakamura and Steinsson (2014) and calibrate a medium-scale, multi-sector new Keynesian model to match the cross-sectional evidence. The model draws on existing medium-scale models such as Smets and Wouters (2007) with two new features to match the French data: first, firms optimally employ workers for 48 hours a week, but are restricted to a 40-hour work-week when the 40-hour law is implemented. As in the data, the implementation of the 40-hour law is staggered across industries. Second, the central bank follows a fixed nominal interest rate policy. We show that to replicate our cross-sectional regression results in the model requires fairly flexible prices (an average duration of four months) and fully-flexible wages. Thus as in Nakamura and Steinsson (2014), our empirical work is informative about general-equilibrium effects because it narrows the plausible parameter-space.With this parameterization of price and wage stickiness in the model, the 40-hour law more than doubles the level of output. The increase in the marginal cost of production from the hours restriction causes firms to gradually raise their prices, ultimately more than doubling the price level. Consumers and firms thus anticipate substantial inflation, which given fixed nominal interest rates means low ex ante real interest rates. The resulting stimulus to consumption and investment leads to the large predicted increase in output.Put differently, because the 40-hour law is so successful at generating expected inflation and lowering ex ante real interest rates, the model predicts it should have lifted the French economy out of depression and generated an unprecedented boom.The model's prediction of output doubling is implausibly large given the French data. Therefore, in section 5 we consider possible sources of the disconnect between the new Keynesian prediction and the data, such as political uncertainty, capital flight, and ongoing strikes. While an evaluation of these factors is necessarily uncertain, we argue that none can resolve the disconnect between the ...

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Bibliographie

Eck¹

2009

Histoire De L’économie Française

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Une erreur de politique économique: La loi des quarante heures de 1936

Cited by 5 publications

References 0 publications

Supply‐Side Policies in the Depression: Evidence from France

Supply‐Side Policies in the Depression: Evidence from France

Supply-Side Policies in the Depression: Evidence from France

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