Gilles Dufrénot’s research while affiliated with Aix-Marseille University and other places

El Niño-Southern Oscillation (ENSO) is a major climate phenomenon that influences temperature and precipitation across the globe. We study the effect of changing ENSO patterns on commodity prices using a Global Factor Local Projections (GFALP) model. Firstly, we demonstrate that unanticipated ENSO movements contribute to commodity price volatility asymmetrically during El Niño and La Niña periods. Secondly, climate change might disrupt ENSO patterns. We compare the current situation with potential climate change outcomes to evaluate its impact on commodity price stability. We compute an index measuring commodity price exposure to these disruptions. We demonstrate that in most cases, these shifts exacerbate commodity price volatility. Finally, we explore several avenues to explain the observed heterogeneity in the exposure of commodity prices to the evolution of ENSO that could result from climate change, and we highlight the crucial role of international commodity markets in adapting to climate change.

A common thread in the literature shows that an oil price shock can have a major impact on global economic conditions. We examine the global dimensions of changes to the global oil price and world economic uncertainty using three model types: ordinary least square (OLS); general additive model (GAM); and non-linear vector autoregression (VAR) model with local projections (LP). Our study highlights a positive and statistically significant effect of oil prices on economic uncertainty during non-expansionary periods, yet the impact is negative on economic uncertainty during periods of economic growth. Using a VAR-LP we analyze the global dimensions of a world oil price shock on global economic conditions and investigate whether there is consistency in how an oil price shock influences economic growth, consumer prices and economic uncertainty based on the state of economic conditions. The empirical evidence shows that during an expansionary (a non-expansionary) period, the impact of an oil price shock lowers (elevates) economic uncertainty. The empirical evidence from the three model types taken together indicate a presence of state dependence on the influence of an oil price shock.

We investigate the role of ENSO climate patterns on global economic conditions. The estimated model is based on a rich and novel monthly dataset for 20 economies, capturing 80.2% of global output (based on IMF data) over the period 1999:01 to 2022:03. The empirical evidence from an estimated global vector autoregression with local projections (GFAVLP) model links an El Niño (EN) shock with higher output and less pronounced inflation, corresponding with lower global economic policy uncertainty (GEPU). A main finding is that an ENSO shock during a La Nina (LN) state elevates food inflation, which can amplify aggregate inflation as a "second-round" effect with ramifications to global economic conditions. Accordingly, an EN (a LN) tends to be associated with higher (lower) output with a limited (higher) impact on aggregate inflation, resulting in a decrease (increase) in GEPU.

We investigate the role of ENSO climate patterns on global economic conditions. The estimated model is based on a rich and novel monthly dataset for 20 economies, capturing 80.2% of global output (based on IMF data) over the period 1999:01 to 2022:03. The empirical evidence from an estimated global vector autoregres-sion with local projections (GFAVLP) model links an El Niño (EN) shock with higher output and inflation, corresponding with lower global economic policy uncertainty (GEPU). While a shock to the world oil and food price is inflationary, a food price shock leads to elevated GEPU, more so during a La Nina (LN) shock. A main finding is that an increase of the food price can be a source of global vulnerability. The findings indicate that the weather shock impact on global economic conditions is dependent on the climate state. Our result undermines existing studies connecting climate change and economic damage via statistical approach.

This chapter discusses some of the research avenues needed to consider in a new way the issues of sustainable growth and development in industrialized countries. It presents the ideas in vogue in several fields of the literature still in their infancy. The first one concerns the global approach of sustainability phenomena. It is necessary to decompartmentalize economic models by proposing an integrated (transdisciplinary) approach to the analysis of growth and development and of the equilibrium of other physical or living ecosystems. Secondly, sustainability necessarily implies a socio-historical dimension, which means that we must understand how politics, history, social anthropology, economics, and geopolitics combine to give rise to stable economic and sociopolitical equilibria. Thirdly, it is the construction of a social contract accepted by all its members that defines the common objectives on which the sustainability of growth rests in the short term but also in the medium/long term: eliminating poverty by facilitating access to primary goods for all, fighting against dynastic inequalities by reducing inequalities, and preserving resources for future generations.

The production function of economies in the twenty-first century—assuming that it correctly summarizes reality—has nothing to do with that of past decades and centuries. New generations of innovations have appeared and question the relationship between capital and labor. The statistics show some paradoxes. In the midst of a new technological revolution, we are witnessing a slowdown in productivity gains, a drop in investment rates, and a decline in labor productivity. Potential growth itself is not as high as it could be. This chapter tries to provide some answers to these puzzles.

This chapter reviews recent debates on the lasting effects of economic shocks that cause hysteresis and super-hysteresis in GDP. We provide an illustration of the implications of such phenomena on the trend GDP trajectories. We also discuss the following issues that have raised strong debates among economists. The first is whether growth in industrialized countries is job-creating (which leads to investigate the validity of Okun’s law). The second question concerns the Phillips curve and its usefulness to explain high and low inflation rates. We discuss the role of expectations, slack variables, and globalization variables. The third topic refers to secular stagnation. The aim is to explain the combination of three phenomena that characterize the new regime of advanced economies: potential growth that evolves along decreasing trajectories, interest rates that follow the same evolution, and core inflation that is far below central bank targets.