We study the cost of cartels in an oligopoly model with heterogeneous firms, endogenous markups, and collusion. Cartels can amplify or dampen misallocation, by charging supracompetitive markups and reallocating demand towards non-colluding firms. Using French micro data, our calibrated model suggests that cartels operating in the most productive industries may decrease aggregate productivity by up to 0.4% and welfare by up to 0.7%. We also find that standard competitive oligopoly models may understate the cost of markups by about 20%.
BibTeX
@article{moreau_panon_cartels,
author = {Moreau, Flavien and Panon, Ludovic},
title = {How Costly Are Cartels?},
journal = {American Economic Journal: Macroeconomics},
year = {forthcoming}
}
APA
Moreau, F., & Panon, L. (forthcoming). How costly are cartels? American Economic Journal: Macroeconomics.
We develop a search-based theory of mergers and acquisitions (M&A) with heterogeneous firms and endogenous search complementarities. We use this model to study how merger incentives, endogenous innovation, and the firm size distribution interact. We derive the law of motion of the firm size distribution, provide closed-form solutions, and solve for firms' investment in internal innovation and external acquisitions. Strategic complementarities in acquisition incentives can generate multiple equilibria, including an unstable equilibrium with high M&A activity. The model therefore offers a new perspective on merger waves as episodes in which favorable fundamentals and coordination interact to generate temporary bursts of acquisition activity. Competition policy can affect both the level of equilibrium merger activity and the set of equilibria the economy can sustain, with implications for innovation, markups, and welfare.
BibTeX
@article{moreau_uslu_merger_waves,
author = {Moreau, Flavien and Üslü, Semih},
title = {A Search-Based Theory of Merger Waves},
journal = {European Economic Review},
year = {2026}
}
APA
Moreau, F., & Üslü, S. (2026). A search-based theory of merger waves. European Economic Review.
This paper documents the existence of judge-specific differences on granting compensation for wrongful dismissal and shows that their consequences are different for small low-performing firms than for other firms. Judger bias reduces employment and survival for small and low-performing firms but has no significant effects on these outcomes for the other firms. The probability that permanent incumbent workers keep their job in firms judged by a pro-worker judge increases in large and high-performing firms, while it decreases in small, poorly performing firms.
BibTeX
@article{cahuc_carcillo_patault_moreau_2024,
author = {Cahuc, Pierre and Carcillo, Stéphane and Patault, Bérengère and Moreau, Flavien},
title = {Judge Bias in Labor Courts and Firm Performance},
journal = {Journal of the European Economic Association},
volume = {22},
number = {3},
pages = {1319--1366},
year = {2024}
}
APA
Cahuc, P., Carcillo, S., Patault, B., & Moreau, F. (2024). Judge bias in labor courts and firm performance. Journal of the European Economic Association, 22(3), 1319–1366.
Saudi Arabia, embarked since 2021 on a large-scale National Investment Strategy (NIS) designed to lift potential GDP growth by diversifying the economy. This article describes the strategy and is the first paper that quantifies its impact on growth using a dynamic general equilibrium model. It also decomposes this impact into two main channels: the direct impact of the investment push and the impact of complementary reforms. We find that the overall strategy — when supported by appropriate fiscal measures, labor supply reform, and higher public sector efficiency — could boost potential non-oil growth by 4.8 percentage points to about 8.8 percent in the medium term. We also assess the growth dividends of a wider range of alternative scenarios around the NIS baseline.
BibTeX
@article{moreau_aligishiev_2024,
author = {Moreau, Flavien and Aligishiev, Zamid},
title = {Diversification in Sight? A Macroeconomic Assessment of Saudi Arabia's Vision 2030},
journal = {International Economics},
volume = {180},
pages = {100538},
year = {2024}
}
APA
Moreau, F., & Aligishiev, Z. (2024). Diversification in sight? A macroeconomic assessment of Saudi Arabia's Vision 2030. International Economics, 180, 100538.
We propose a dynamic production function of population health and mortality from birth onward. Our parsimonious model provides an excellent fit for the mortality and survival curves for primate and human populations since 1816. The model sheds light on the dynamics behind many phenomena documented in the literature. Simple extensions of the model can reproduce (1) the existence and evolution of mortality gradients across socioeconomic statuses documented in the literature, (2) non-monotonic dynamic effects of in utero shocks, (3) persistent or scarring effects of wars, and (4) mortality displacement after large temporary shocks, such as extreme weather.
BibTeX
@article{llerasmuney_moreau_2022,
author = {Lleras-Muney, Adriana and Moreau, Flavien},
title = {A Unified Model of Cohort Mortality for Economic Analysis},
journal = {Demography},
volume = {59},
number = {6},
pages = {2109--2134},
year = {2022}
}
APA
Lleras-Muney, A., & Moreau, F. (2022). A unified model of cohort mortality for economic analysis. Demography, 59(6), 2109–2134.
This paper studies the macroeconomic dynamics of conflicts and post-conflict recovery using a newly assembled global dataset covering 194 countries, including 170 conflict onsets and 158 conflict terminations, over the period 1946–2024. Using a local-projection difference-in-differences framework we trace the evolution of macroeconomic aggregates around conflict onset and termination. We make four contributions. First, output losses from conflicts typically exceed those associated with banking, currency, and sovereign debt crises, as well as severe natural disasters. Second, external-sector dynamics constitute a central mechanism through which wars amplify macroeconomic challenges, despite policymakers' efforts to contain the war shock. Third, post-conflict recoveries are slow and uneven and depend critically on the durability of peace: conflict resumption stalls recovery prospects, while sustained peace produces only gradual recoveries relative to wartime losses. These recoveries are typically labor-led, while capital accumulation and productivity remain subdued. Fourth, firm-level evidence confirms this labor-led recovery and points to persistent financial constraints that hinder capital rebuilding during the post-conflict period. We propose an external-sector adjustment mechanism in the form of a war-driven sudden stop and show that economies entering a war with weaker external balance sheets---a higher ratio of short-term external debt to reserves---suffer both a deeper wartime contraction and a slower recovery.
BibTeX
@techreport{balima_etal_conflict_2026,
author = {Balima, Hippolyte and Ladreit, Colombe and Lagerborg, Andresa and Moreau, Flavien and Presbitero, Andrea F. and Weaver, Evgenia},
title = {The Macroeconomics of Conflict and Recovery},
institution = {International Monetary Fund},
type = {IMF Working Paper},
year = {2026}
}
APA
Balima, H., Ladreit, C., Lagerborg, A., Moreau, F., Presbitero, A. F., & Weaver, E. (2026). The macroeconomics of conflict and recovery (IMF Working Paper). International Monetary Fund.
The share of Latin America's working-age population has begun to fall, on the back of increased longevity and falling birth rates. The female participation response to falling child dependency is the largest domestic margin available to offset it. We quantify that margin, combining harmonized microdata from seven large economies with a tractable overlapping generations model in which female labor supply responds endogenously to household composition. We first decompose the region's gender participation gap into several margins, with about one third arising from the differential labor supply response to household composition between men and women (a “motherhood penalty”). Embedding these micro-estimates in a general equilibrium framework, we find that the female participation response to falling child dependency can partially offset the demographic drag, raising regional GDP by between 3.1 and 11.3 percent by 2050 relative to a path with participation held fixed. The range reflects both fundamental uncertainty around future paths of comoving national trends and substantial heterogeneous labor supply responses across countries.
BibTeX
@techreport{casas_gomezparra_moreau_2026,
author = {Casas, Camila and Gomez-Parra, Nicolas and Moreau, Flavien},
title = {Offsetting the Demographic Drag? Endogenous Female Labor Supply in Latin American Economies},
institution = {International Monetary Fund},
type = {IMF Working Paper},
number = {2026/203},
year = {2026}
}
APA
Casas, C., Gomez-Parra, N., & Moreau, F. (2026). Offsetting the demographic drag? Endogenous female labor supply in Latin American economies (IMF Working Paper No. 2026/203). International Monetary Fund.
Rej.&R
Beyond Tariffs: Infrastructure Gaps and Trade in Latin America
with Rina Bhattacharya, Rafael Parente, and Sam Pienknagura
Trade barriers and poor infrastructure play an important role in limiting trade integration in Latin America and the Caribbean (LAC). Closing half of the infrastructure gap between LAC and advanced economies could lift exports by 30 percent. Reducing import tariffs could boost LAC's trade, but its responsiveness is lower than in other EMDEs, particularly in the long run, due to the region's specialization in agricultural exports with inelastic demand and supply constraints like growing cycles and weather conditions. Amid deepening global trade tensions, LAC is well placed to withstand a mild trade fragmentation scenario, in which trade barriers are erected only among large economies. However, the region's output losses could be sizable in more extreme scenarios, where the global economy splinters into competing economic blocs and LAC loses access to important markets. Boosting trade, including regional trade, could pay a double dividend of lifting growth in the region while mitigating risks from global fragmentation.
BibTeX
@techreport{bhattacharya_moreau_parente_pienknagura_tariffs,
author = {Bhattacharya, Rina and Moreau, Flavien and Parente, Rafael and Pienknagura, Sam},
title = {Beyond Tariffs: Infrastructure Gaps and Trade in Latin America},
institution = {International Monetary Fund},
type = {Working Paper},
year = {2024}
}
APA
Bhattacharya, R., Moreau, F., Parente, R., & Pienknagura, S. (2024). Beyond tariffs: Infrastructure gaps and trade in Latin America [Working paper]. International Monetary Fund.
Prioritizing populations most in need of social assistance is an important policy decision. In the Eastern Caribbean, social assistance targeting is constrained by limited data and the need for rapid support in times of large economic and natural disaster shocks. We leverage recent advances in machine learning and satellite imagery processing to propose an implementable strategy in the face of these constraints. We show that local well-being can be predicted with high accuracy in the Eastern Caribbean region using satellite data and that such predictions can be used to improve targeting by reducing aggregation bias, better allocating resources across areas, and proxying for information difficult to verify.
BibTeX
@techreport{chen_matsuura_moreau_pereira_2024,
author = {Chen, Sophia and Matsuura, Ryu and Moreau, Flavien and Pereira, Joana},
title = {Harnessing Satellite Data to Improve Social Assistance Targeting in the Eastern Caribbean},
institution = {International Monetary Fund},
type = {IMF Working Paper},
number = {2024/084},
year = {2024}
}
APA
Chen, S., Matsuura, R., Moreau, F., & Pereira, J. (2024). Harnessing satellite data to improve social assistance targeting in the Eastern Caribbean (IMF Working Paper No. 2024/084). International Monetary Fund.
I propose a novel identification strategy to estimate the elasticity of substitution between capital and labor at the firm level, taking advantage of a set of size-dependent policies. These policies create a break in the size distribution of French firms by employment. To the extent that firms around the threshold distort their capital-labor ratio, the elasticity of substitution can be recovered from firm-level distorted factor ratios and the amount of bunching. On the other hand, because firms have an incentive to under-report their size, part of the apparent distortions is only due to evasion. I derive closed-form formulas that link the elasticity to observed distortions at the firm level. I then aggregate these micro elasticities to analyze capital-labor substitution in the aggregate economy. I find that firm-level distortions are small, and therefore that the micro-elasticities are small and close to 0.1. I obtain an aggregate elasticity of 0.3, about half as small as the values usually assumed. Moreover, the discrepancies between self-reported employment and a measure of employment made by the administration provide direct evidence that evasion accounts for a large fraction of the observed distortions.
BibTeX
@techreport{moreau_capital_labor_substitution,
author = {Moreau, Flavien},
title = {Inferring Capital-Labor Substitution from Firm Size Distortions},
type = {Working Paper},
year = {2020}
}
APA
Moreau, F. (2020). Inferring capital-labor substitution from firm size distortions [Working paper].
Selected work in progress
Import Intermediaries, Inventories, and Investment