Do you know what an “econometric model” is? It is a set of intertwined equations, whose variables are economic quantities. Its function is to simulate the activity in its complexity. Oracles of modern times, these models are useful for forecasting or testing the impact of reforms. Most of them have ugly acronyms (the worst being “Garch”, for Generalized AutoRegressive Conditional Heteroskedasticity), but the one used by the French Treasury has the amazing name of Mésange (for Model econometric of Simulation and General Analysis of the ‘Economy). When Bercy wants to know what effect an increase in oil prices or a VAT point will have on the economy, he spins Mésange.
This is what was done with the pension reform. Chickadee, my beautiful chickadee, what will happen if we extend the working time by two years? As there will be more hours worked in France, there will be more pension contributions, fewer pensions to be paid, but also more
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