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Thomas Chalaux

Bio: Thomas Chalaux is an academic researcher from Organisation for Economic Co-operation and Development. The author has contributed to research in topics: Productivity & Product market. The author has an hindex of 9, co-authored 20 publications receiving 253 citations.

Papers
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Report SeriesDOI
TL;DR: The 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china) as discussed by the authors showed that the use of interest rates in implementing monetary policy would enhance macroeconomic stabilisation while avoiding a number of drawbacks of the current quantity-based approach.
Abstract: As a result of reforms and financial sector development, the People’s Bank of China (PBoC) now exerts significant control over money market interest rates. With money market conditions increasingly influencing effective commercial lending rates, the PBoC is also able to affect the cost of credit without recourse to its benchmark commercial bank rates. Furthermore, interest rates are an important determinant of investment spending in China, via the user cost of capital, and aggregate economic activity influences inflation. Hence, greater use of interest rates in implementing monetary policy would enhance macroeconomic stabilisation while avoiding a number of drawbacks of the current quantity-based approach. In addition, increased flexibility in the exchange rate would enhance its role in offsetting macroeconomic shocks and allow the PBoC more scope to tailor monetary policy to domestic macroeconomic conditions. Concurrently, changes in the PBoC’s policy stance should be predicated on informed judgments based on the monitoring of a set of indicators in conjunction with a flexible inflation objective as the nominal anchor. This paper relates to the 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china).

39 citations

Journal ArticleDOI
TL;DR: The authors examines recent micro-evidence on the productivity of Indian firms, helping to explain why India's manufacturing sector has not performed as well as many observers expected, and suggests that much remains to be done to improve the strength and sustainability of India's development path.
Abstract: This article examines recent micro-evidence on the productivity of Indian firms, helping to explain why India’s manufacturing sector has not performed as well as many observers expected. A series of structural distortions are documented, all of which may depress the performance of manufacturing, and thus the economy as a whole. These distortions exist at multiple levels, and reflect long-standing problems with the reallocation of labour across sectors, the excessively small scale of firms, low firm turnover, poor product market integration, high industry concentration and persistent state ownership. Combined, these phenomena represent severe restraints on the level and growth of productivity in manufacturing, and suggest that much remains to be done to improve the strength and sustainability of India’s development path.

39 citations

Report SeriesDOI
TL;DR: A divergence in performance has taken place, with firms in those states and sectors with the best institutions gaining, and those in the more tightly regulated states or sectors falling further behind as discussed by the authors.
Abstract: India’s growth performance has improved significantly over the past 20 years, but has been uneven across industries and states. While some service industries, notably in the information and communications technology sector, have become highly competitive in world markets – yielding considerable gains for employees and investors – manufacturing industries have lagged and improved their performance only recently. A divergence in performance has taken place, with firms in those states and sectors with the best institutions gaining, and those in the more tightly regulated states and sectors falling further behind. As a result, the competitive landscape is uneven across sectors and states and a high degree of concentration continues to prevail in different industries. While this is partly the result of the legacy of licensing, change has been politically difficult, making it harder for the manufacturing sector than for the service sector to expand. The need for further institutional reforms is urgent, focusing on product and labour market regulations at the central and state levels. This working Paper relates to the 2007 Economic Survey of India (www.oecd.org/eco/surveys/india).

32 citations

Report SeriesDOI
TL;DR: In this paper, a new law enshrining the rights of all children to free and compulsory education will further lift enrolment, bringing closer the government's goal of universal elementary education, which comprises eight years of schooling.
Abstract: Education has been given high priority by India’s central and state governments and continues to grow fast. School access has been expanded by investment in school infrastructure and recruitment of teachers. In higher education too, the number of providers continues to rise rapidly. A new law enshrining the rights of all children to free and compulsory education will further lift enrolment, bringing closer the government’s goal of universal elementary education, which comprises eight years of schooling. Nevertheless, high drop-out rates and low attendance continues to be a challenge at lower levels and enrolment at higher levels remains modest by international standards. Private sector involvement is on the rise. While it helps expand education infrastructure, particularly in higher education, access has not always been assured and the availability of student loans for higher education needs to improve. Poor learning outcomes amongst school students and mediocre higher education provision call for more effective government regulation and funding arrangements. Expanding resources will help but they need to be deployed more effectively, while incentives and professional development systems for teachers need to be strengthened. In higher education the government has proposed reforms which have the potential to bring about much-needed improvements in regulatory effectiveness. Efforts should focus on reducing micro-regulation and improving institutional autonomy, in order to stimulate innovation and diversity. Increasing the number of institutions subjected to quality assessments will be important for lifting standards across the higher education system, while reform of recruitment and promotion mechanisms could help attract and retain talent in academia.

31 citations

Report SeriesDOI
TL;DR: In this paper, the authors used the OECD's indicators of product market regulation to assess the extent to which the regulatory environment affects economic performance across Indian states and found that the degree to which market regulation is supportive of competition is found to vary considerably across states.
Abstract: This paper uses the OECD's indicators of product market regulation to assess the extent to which the regulatory environment affects economic performance across Indian states. The degree to which product market regulation is supportive of competition is found to vary considerably across states. Furthermore, regression results indicate that these differences in regulation have a significant impact on both labour and total factor productivity. States in which the regulatory environment restricts competition have lower productivity growth in comparison to states in which regulation is more supportive of competition. Relatively liberal states are also found to attract more foreign investment and have a larger share of employment in the organised sector in comparison to states with a more restrictive regulatory environment. State governments that have enacted a relatively liberal regulatory framework have also been more successful at infrastructure provision. Ongoing reform of product market regulation is necessary to improve productivity growth further and ensure that the benefits of reform are distributed more widely across the country. This working Paper relates to the 2007 Economic Survey of India (www.oecd.org/eco/surveys/india).

22 citations


Cited by
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Report SeriesDOI
TL;DR: This article examined the relationship between tax structures and economic growth by entering indicators of the tax structure into a set of panel growth regressions for 21 OECD countries, in which both the accumulation of physical and human capital are accounted for.
Abstract: This paper examines the relationship between tax structures and economic growth by entering indicators of the tax structure into a set of panel growth regressions for 21 OECD countries, in which both the accumulation of physical and human capital are accounted for. The results of the analysis suggest that income taxes are generally associated with lower economic growth than taxes on consumption and property. More precisely, the findings allow the establishment of a ranking of tax instruments with respect to their relationship to economic growth. Property taxes, and particularly recurrent taxes on immovable property, seem to be the most growth-friendly, followed by consumption taxes and then by personal income taxes. Corporate income taxes appear to have the most negative effect on GDP per capita. These findings suggest that a revenue-neutral growth-oriented tax reform would be to shift part of the revenue base towards recurrent property and consumption taxes and away from income taxes, especially corporate taxes. There is also evidence of a negative relationship between the progressivity of personal income taxes and growth. All of the results are robust to a number of different specifications, including controlling for other determinants of economic growth and instrumenting tax indicators.

169 citations

Report SeriesDOI
TL;DR: The empirical estimates suggest that potential efficiency gains might be large enough to raise life expectancy at birth by almost three years on average for OECD countries, while a 10% increase in total health spending would increase life expectancy by three to four months.
Abstract: This paper aims to shed light on the contribution of health care and other determinants to the health status of the population and to provide evidence on whether or not health care resources are producing similar value for money across OECD countries. First, it discusses the pros and cons of various indicators of the health status, concluding that mortality and longevity indicators have some drawbacks but remain the best available proxies. Second, it suggests that changes in health care spending, lifestyle factors (smoking and alcohol consumption as well as diet), education, pollution and income have been important factors behind improvements in health status. Third, it derives estimates of countries’ relative performance in transforming health care resources into longevity from two different methods – panel data regressions and data envelopment analysis – which give remarkably consistent results. The empirical estimates suggest that potential efficiency gains might be large enough to raise life expectancy at birth by almost three years on average for OECD countries, while a 10% increase in total health spending would increase life expectancy by three to four months.

149 citations

Journal ArticleDOI
TL;DR: The role of reserve requirements as a policy tool in China has been examined in this article, showing that higher reserve requirements tend to signal a tightening bias, to squeeze excess reserves of banks, to push market interest rates higher, and to help widen net interest spreads, thus tightening domestic monetary conditions.
Abstract: This paper examines the evolving role of reserve requirements as a policy tool in China. Since 2007, the Chinese central bank (PBC) has relied more on this tool to withdraw domestic liquidity surpluses, as a cheaper substitute for open-market operation instruments in this period of rapid FX accumulation. China’s reserve requirement system has also become more complex and been used to address a range of other policy objectives, not least being macroeconomic management, financial stability and credit policy. The preference for using reserve requirements reflects the size of China’s FX sterilization task and the associated cost considerations, a quantity-oriented monetary policy framework challenged to reconcile policy dilemmas and tactical considerations. The PBC often finds it easier to reach consensus over reserve requirement decisions than interest rate decisions and enjoys greater discretion in applying this tool. The monetary effects of reserve requirements need to be explored in conjunction with other policy actions and not in isolation. Depending on the policy mix, higher reserve requirements tend to signal a tightening bias, to squeeze excess reserves of banks, to push market interest rates higher, and to help widen net interest spreads, thus tightening domestic monetary conditions. There are, however, costs to using this policy tool, as it imposes a tax burden on Chinese banks that in turn appear to have passed a significant portion of this cost onto their customers, mostly depositors and SMEs. However, the pass-through onto bank customers appears to be partial.

119 citations

Journal ArticleDOI
TL;DR: In this article, the balance of several overriding policy objectives has determined the direction of the affordable housing policy in urban China, including promoting economic growth and urbanization through efficient allocation of housing-related resources and ensuring political consolidation and social stability by maintaining housing affordability for mainstream society.

117 citations

Posted Content
TL;DR: Lehigh Valley Partnership and Lehigh Valley Economic Development Corporation (LVEDC) as discussed by the authors gave their views on the regional and national economy and discussed why they remain optimistic about the economic outlook.
Abstract: Lehigh Valley Partnership and Lehigh Valley Economic Development Corporation. Allentown, PA. President Charles Plosser gives his views on the regional and national economy and discusses why he remains optimistic about the economic outlook. He also shares his thoughts about monetary policy and explains why he departed from the majority view at the July and September FOMC meetings.

99 citations