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France in the Global Economy :, A Structural Approximate Dynamic Factor Model Analysis, Francisco Nadal De Simone, Alain Kabundi

This study identifies the main shocks that cause fluctuations in French output and their channels of transmission. It uses a large-dimensional structural approximate dynamic factor model. There are three main findings. First, common shocks, especially demand shocks, which seem to originate from the U.S., play an important role in explaining French economic activity. While international trade, relative prices, and FDI flows are the main channels of transmission, the stock market, consumer confidence, and interest rates also matter. Second, France's integration with the rest of the world has increased over time. Third, there is some tentative evidence of regional components in explaining French output fluctuations; countryspecific components also contribute. The predominance of exogenous factors affecting French output, the asymmetry in the transmission of shocks, and France's participation in a currency area, argue for making French goods, services, and labor markets as flexible as possible
Table Of Contents
Contents; I. Introduction; II. Methodology; A. The Model; B. Economic Conditions for Shocks Identification; III. Data and Estimation; A. Data Discussion; B. Estimation; IV. Econometric Results; A. U.S. Shocks; B. Channels of Transmission of U.S. Shocks to France; C. Is There Evidence of Increasing Interdependence Among Countries?; V. Conclusion and Policy Implications; Figures; 1. Impulse-Response Functions; 2. Common Components: Q2 1991-Q4 2003; 3. Common Components: Q2 1991-Q4 2003; Tables
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (47 p.)
Specific Material Designation
Form Of Item

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