Philippe Aghion Research Articles

Academia Europaea The Academy of Europe The Academia Europaea is pleased to award an Erasmus Medal to the internationally renowned economics scholar Professor Philippe Aghion MAE

Academia Europaea The Academy of Europe The Academia Europaea is pleased to award an Erasmus Medal to the internationally renowned economics scholar Professor Philippe Aghion MAE

Book Reviews

Amitrajeet A. Batabyal reviews “Fully Grown: Why a Stagnant Economy is a Sign of Success” by Dietrich Vollrath. Taylor Friedman reviews “The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations” by Philippe Aghion, Céline Antonin, and Simon Bunel. Amitrajeet A. Batabyal reviews “The Tyranny of Merit: What’s Become of the Common Good?” by Michael J. Sandel. Michael Cary reviews “Handbook of Cities and Networks” by Céline Rozenblat and Zachary P. Neal.

Philippe Aghion, Céline Antonin, and Simon Bunel. The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations

Philippe Aghion, Céline Antonin, and Simon Bunel. The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations

Импортозависимость российской гражданской авиационной промышленности

Sanctions and restrictions by “unfriendly countries” in February-March 2022 affected many areas of the Russian economy. The article discusses the possible consequences of sanctions for Russian aviation and the aviation industry in terms of the problem of overcoming dependency on imports and the potential for transition to long-term development based on an import substitution strategy. Data on the structure of the aircraft fleet of the largest Russian companies are presented, and a conclusion is made about the critical dependency of most of them on import supplies and services. The historical development of the domestic aviation industry in the post-Soviet period is shown, the conclusion is made about the choice of a strategy for international cooperation, including in connection with the use of the advantages of “catch-up development” on the basis of the strategy of “market fundamentalism”, within the framework of the “Ideologeme of Philippe Aghion”. The predominance of foreign-made liners in the flight fleet of Russian companies is explained by the significant opportunities for the acquisition of new airliners through leasing schemes by Russian air carriers, the lack of a strategy for independence from imports of domestic aviation companies in the period up to 2014, and an emphasis on the priority renewal of the aircraft fleet by Russian airlines. The history of the development of two models of domestic aircrafts -Sukhoi Superjet 100 and MS-21, and the difficulties associated with the orientation of companies towards the production of military aircrafts, especially in the light of sectoral sanctions, are discussed. Based on an analysis of the development of the aviation industry in Russia in 2014-2022, the difficulty of abandoning international cooperation in the production of civil aircraft is stated. Despite the adoption of the Sectoral Plan of Measures for Import Substitution in the Civil Aircraft Industry of the Russian Federation, in fact, the goal of reducing import dependency was not achieved. The prospects for the proposed measures in the field of import substitution in the new conditions are discussed, in particular in relation to the production of Russian aircraft engines. Despite partial success, the work on certification of domestic PD-8 and PD-14 engines is still far from industrial development. The complexity of implementing the autarchy strategy for the development of a competitive Russian aviation industry in the medium term is shown. It is noted that in the medium term, in the conditions of a tough version of the current sanctions, the civil aircraft industry is waiting for a difficult path with “self-reliance”.

Stepwise Innovation by an Oligopoly

Stepwise models of technological progress described by Philippe Aghion and his co-authors (1997, 2001, 2005) capture the incentives of firms to innovate in order to escape competition and the disincentives from sharing profits with other technological leaders. The models yield intuitively appealing predictions about the effects of competition on innovation, but they are limited to competition in duopolies. This paper extends the models to oligopolies and shows that the predictions of the effects of competition on innovation from the duopoly models do not generalize to oligopolies.

ПРОБЛЕМЫ ДОЛГОСРОЧНОГО РОСТА ТЕКСТИЛЬНОЙ ИШВЕЙНОЙ ПРОМЫШЛЕННОСТИ РОССИИ

The article examines the regularities of the textile and clothing industry development in the conditions of globalization and challenges of the fourth industrial revolution from the view point of long-term growth theories. It stresses the historical role of the industry as a structural component of the national economy. The purpose of the study is to assess the current state, to determine the opportunities and trends of innovative breakthrough of the Russian textile and clothing industry. The methodologically the research is based on the fundamental models of economic growth. The article analyzes the trends of the global textile products and reveals the gap extent between Russian industry and the manufacturers in the leading countries. The hypothesis that the achievement of high growth rates in the textile and clothing industries can be ensured by a dynamic and steady growth of investments in fixed capital and human assets has been confirmed in the case study of China and Russia. To bring the industry out of the deep crisis, the necessity of using an endogenous model of economic growth based on investments in knowledge, new technologies and intellectual capital has been substantiated. The conceptual features of innovative development strategies implemented in Germany, the USA, China, India and Turkey have been characterized. The main directions of the growth model and restructuring of the textile and clothing industry in Russia have been identified. They are digital transformation under the influence of diffusion of advanced technologies, growth of the share of high-tech products and technical textiles, technological modernization of traditional production lines, creation of factories of the future, innovative platforms and clusters, development of institutions. It has been concluded, that at the present stage the most appropriate competitive strategy is dynamic catch-up that provides active adaptation and implementation of the world's best achievements in research and development. Particular attention is paid to institutions and huge state support for the development of conditions for business process integration, for the provision of interaction of all participants in the innovation and technological growth of the industry, as well as for the development of infrastructures and the formation of a favorable investment climate. Further studies in the field will be related to the use of tools of economic and mathematical modeling to study the factors of long-term growth of the textile and clothing industry in Russia and predict trends in its development. Keywords textile and clothing industry, endogenous growth model, digital economy, the factory of the future, the fourth industrial revolution, economy didgitalization, innovative system, development institutions, competitive advantages, global textile market. Acknowledgements The study was financially supported by the Russian Foundation for Basic Research grant No. 18-410-370004 “Forecast and assessment of strategic directions of socio-economic and innovative development of the textile industry on the basis of foresight research”.

Comment

Comment

Philippe Aghion: recipient of the 2016 Global Award for Entrepreneurship Research

Professor Philippe Aghion is the 2016 recipient of the Global Award for Entrepreneurship Research, consisting of 100,000 Euros and a statuette designed by the internationally renowned Swedish sculptor Carl Milles. He is one of the most influential researchers worldwide in economics in the last couple of decades. His research has advanced our understanding of the relationship between firm-level innovation, entry and exit on the one hand, and productivity and growth on the other. Aghion has thus accomplished to bridge theoretical macroeconomic growth models with a more complete and consistent microeconomic setting. He is one of the founding fathers of the pioneering and original contribution referred to as Schumpeterian growth theory. Philippe Aghion has not only contributed with more sophisticated theoretical models, but also provided empirical evidence regarding the importance of entrepreneurial endeavours for societal prosperity, thereby initiating a more nuanced policy discussion concerning the interdependencies between entrepreneurship, competition, wealth and growth.

Capital Market Operations and its Impacts on Local Investments in Nigeria

This study examines the Nigerian capital market Operations, and its impact on Local investments in Nigeria aswith The main theoretical model, growth results from innovations that allow local sectors to catch up with frontier technology. In developing countries, catching up requires the cooperation of a foreign investor who is familiar with the frontier technology and a domestic entrepreneur who is familiar with local conditions, In such a country, domestic capital market matters for innovation, and therefore growth, because it enables the local entrepreneur to put equity into this cooperative venture (Philippe Aghion et al 2009)and to empirically analyze the impact of the capital market operations on local investment. In analyzing the impact, the time series of data cover the period of 1972 to 2011. Gross domestic Product is regressed on the Capital market variables (Market capitalization, Number of Dealings and All share indexes) to check the long run effect of capital market activities on the growth of the economy neoclassical growth model is use to explain the source of growth in the economy. The relevance of the capitalmarket in the encouragement of local investment and economic development were highlighted. The paper concludes with recommendation to stem up investors confidence and activities in the capital market so that it could contribute significantly to the growth of local investment in Nigeria.

Islamic Rule and the Emancipation of the Poor and Pious

Does Islamic political control affect women’s empowerment? Several countries have recently experienced Islamic parties coming to power through democratic elections. Due to strong support among religious conservatives, constituencies with Islamic rule often tend to exhibit poor women’s rights. Whether this relationship reflects a causal or a spurious one has so far gone unexplored. I provide the first piece of evidence using a new and unique dataset of Turkish municipalities. In 1994, an Islamic party won multiple municipal mayor seats across the country. Using a regression discontinuity (RD) design, I compare municipalities where this Islamic party barely won or lost elections. Despite negative raw correlations, the RD results reveal that over a period of six years, Islamic rule increased female secular high school education. Corresponding effects for men are systematically smaller and less precise. In the longer run, the effect on female education remained persistent up to 17 years after and also reduced adolescent marriages. An analysis of long-run political effects of Islamic rule shows increased female political participation and an overall decrease in Islamic political preferences. The results are consistent with an explanation that emphasizes the Islamic party’s effectiveness in overcoming barriers to female entry for the poor and pious. ∗Address: Stockholm Institute for Transition Economics (SITE), Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden. Email: erik.meyersson@hhs.se. Website: www.erikmeyersson.com. I am particularly indebted to my advisers Torsten Persson and David Stromberg for their support. In addition, I am grateful to Daron Acemoglu, Philippe Aghion, Yesim Arat, Sascha Becker, Olle Folke, Guido Imbens, Murat Iyigun, Asim Khwaja, Gulay Ozcan, Alp Simsek, Insan Tunali, several anonymous referees; conference and seminar participants at CEPR, Duke, Georgetown, Harvard, IIES, Koc, LSE, MIT, NBER, Sciences-Po, UC-Berkeley, UPF, and Warwick for useful comments. The author has benefited much from discussions with several Turkish academics, former government employees, politicians, and teachers who have asked to remain anonymous. The assistance of the Turkish Statistical Institute and the Swedish Research Institute in Istanbul is gratefully acknowledged. All remaining errors are mine. The views, analysis, and conclusions in this paper are solely the responsibility of the author.

DOES THE CAPITAL INTENSITY MATTER? EVIDENCE FROM THE POSTWAR JAPANESE ECONOMY AND OTHER OECD COUNTRIES

The capital intensity takes an important role in two-sector and multisector growth models. Surprisingly very few empirical studies have been conducted so far except by Kuga (1967). This fact implies that few people have ever tried to perform any empirical research to study whether the two-sector and multisector optimal growth models could explain the economic development properly based on the empirical data. Although we witnessed fairly active theoretical research on two-sector and multisector growth models in the 1990s and recent years, R. M. Solow has thrown doubt on the capital intensities [in Philippe Aghion and Steven Durlauf (eds.),Handbook of Economic Growth, Vol. 1A (2005, pp. 3–10)]. Our purpose is to measure the capital intensities of the consumption good and the investment good sectors mainly in the postwar Japanese economy, and also in other OECD countries. By so doing, we will demonstrate that the capital intensity does matter and our empirical evidence will strongly support the common assumption that the consumption goods sector is more capital-intensive than the capital goods sector.

Exclusive Contracts, Innovation, and Welfare

We extend Philippe Aghion and Patrick Bolton's (1987) classic model to analyze the equilibrium incidence and impact of exclusive contracts in a setting where research and development (R&D) drives industry performance. An exclusive contract between an incumbent supplier and a buyer arises when patent protection and/or the incumbent's R&D ability are sufficiently pronounced. The exclusive contract generally reduces the entrant's R&D, and can reduce the incumbent's R&D. Exclusive contracts reduce welfare if the incumbent's R&D ability is sufficiently limited, but can increase welfare if patent protection and the incumbent's R&D ability are sufficiently pronounced. (JEL D86, L14, O31)

The Public and Private Sectors in the Process of Innovation: Theory and Evidence from the Mouse Genetics Revolution

The Public and Private Sectors in the Process of Innovation: Theory and Evidence from the Mouse Genetics Revolution by Philippe Aghion, Mathias Dewatripont, Julian Kolev, Fiona Murray and Scott Stern. Published in volume 100, issue 2, pages 153-58 of American Economic Review, May 2010

The Economics of Growth

article reviews the book The Economics of Growth, by Philippe Aghion and Peter Howitt.

The governance and performance of universities: evidence from Europe and the US

We test the hypothesis that universities are more productive when they are both more autonomous and face more competition. Using survey data, we construct indices of university autonomy and competition for both Europe and the United States. We show that there are strong positive correlations between these indices and multiple measures of university output. To obtain causal evidence, we investigate exogenous shocks to US universities’ expenditures over three decades. These shocks arise through the political appointment process, which we use to generate instrumental variables. We find that an exogenous increase in a university’s expenditure generates more output, measured by either patents or publications, if the university is more autonomous and faces more competition. Exploiting variation over time in the ‘stakes’ of competitions for US federal research grants, we also find that universities generate more output for a given expenditure when research competitions are high stakes. We draw lessons, arguing that European universities could benefit from a combination of greater autonomy and greater accountability. Greater accountability might come through increased reliance on competitive grants, enhanced competition for students and faculty (promoted by reforms that increase mobility), and yardstick competitions (which often take the form of assessment exercises). — Philippe Aghion, Mathias Dewatripont, Caroline Hoxby, Andreu Mas-Colell and André Sapir

Knowledge, Information, and Expectations in Modern Macroeconomics: In Honor of Edmund S. Phelps ‐ Edited by Philippe Aghion, Roman Frydman, Joseph Stiglitz and Michael Woodford

<i>Knowledge, Information, and Expectations in Modern Macroeconomics: In Honor of Edmund S. Phelps</i> ‐ Edited by Philippe Aghion, Roman Frydman, Joseph Stiglitz and Michael Woodford

Competition and Growth: Reconciling Theory and Evidence ‐ by Philippe Aghion and Rachel Griffith

Economic RecordVolume 82, Issue 258 p. 372-374 Competition and Growth: Reconciling Theory and Evidence - by Philippe Aghion and Rachel Griffith Russell Thomson, Russell Thomson Australian National UniversitySearch for more papers by this author Russell Thomson, Russell Thomson Australian National UniversitySearch for more papers by this author First published: 04 August 2006 https://doi.org/10.1111/j.1475-4932.2006.00351.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Volume82, Issue258September 2006Pages 372-374 RelatedInformation

Introduction: New Directions in Productivity Analysis

Today, economists acknowledge the basic relationship between productivity growth and improvements in living standards and all agree about the need to provide a more accurate assessment of productivity gain across time and space. But, beyond this basic consensus, the stream of empirical productivity analysis is certainly one of the most vividly debated in the economic literature. Since the surge of growth accounting exercises in the 1950’s, each decade witnessed important controversies which lead to new developments and further improvements. In the last decade, these renewals have been profound and motivated by three main sources. Firstly, the resumption of productivity growth in the 1990s after the productivity slowdown of the 1970s and 1980s provoked controversies among policymakers and researchers, and forced economists to reexamine the fundamental question of measurement techniques (Hulten et al. , 2001). Secondly, the important contribution of Philippe Aghion and Peter Howitt’s 1992 paper opened up new directions for empirical productivity analysis. In formalizing aggregate productivity growth as the outcome of a process of creative destruction, they invited us to explore the correlation between productivity growth and the endogenous flow of firm entry and exit and the endogenous rate of capital obsolescence. Thirdly, the new and growing availability of large scale longitudinal firmlevel datasets, provided radically new ways to connect micro-and aggregate productivity growth dynamics. Following on the pioneering micro-

Comments on Papers by Saint-Paul, Aghion, and Bhidé

A new Center on Capitalism and Society must begin by discovering the center of gravity of its own research. Its name is obviously too inclusive to define what it intends to do. That will eventually depend on the intellectual history of the scholars involved in the Center, and on the immediate “social” and “capitalist” environment that impresses itself upon them. Having been given three quite diverse papers to absorb, I think I can best serve the Center’s purpose not by writing a referee’s report on each of them but rather by picking out a few interesting and novel themes grasped - or perhaps merely grazed - by the authors, and indicating why they seem interesting, and what further inquiries they suggest.This paper is a comment on: Will Limited Needs Kill Capitalism? by Gilles Saint-Paul which can be found at: http://ssrn.com/abstract=2205770; Interaction Effects in the Relationship between Growth and Finance by Philippe Aghion which can be found at: http://ssrn.com/abstract=2205757; and How Novelty Aversion Affects Financing Options by Amar V. Bhide which can be found at: http://ssrn.com/abstract=2205772.

Technological Progress and Economic Transformation

Growth theory can go a long way toward accounting for phenomena linked with U.S. economic development. Some examples are: (i) the secular decline in fertility between 1800 and 1980, (ii) the decline in agricultural employment and the rise in skill since 1800, (iii) the demise of child labor starting around 1900, (iv) the increase in female labor-force participation from 1900 to 1980, (v) the baby boom from 1936 to 1972. Growth theory models are presented to address all of these facts. The analysis emphasizes the role of technological progress as a catalyst for economic transformation. This survey paper is in preparation for the Handbook of Economic Growth edited by Philippe Aghion and Steven Durlauf (North-Holland, Amsterdam).