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The Covid-19 pandemic prompted the development of multiple disciplinary approaches. However, the formalization of epidemiological and economic transmission mechanisms reveals biases that may affect the optimal choices of public policies. First, the macroeconomic approach does not systematically take into account the different channels through which the shock is amplified, such as the amplification of demand shocks and the persistence of asset price shocks. Secondly, the macroeconomic and epidemiological statistical data developed during a pandemic raise difficulties. For example, the parameters of the viral propagation model are not known in the early stages, in particular the case-fatality rate. Finally, the epidemiological models themselves may be biased, especially in the case of viruses whose spread is not characterised by a standard Markov process, and in the case where the different levels of heterogeneity of contact networks (human, transport, etc.) are not taken into account. These biases are reinforced, for most advanced economies, by the inexperience of public authorities in the context of major pandemics.

We studied changes in the mark-ups of the different sectors for France and Germany and reconstruct an export sector mark-up for these two countries from the national accounts and OECD value-added trade data. The main driver of divergences in the export sector's mark-ups (5 value-added points over 1995-2017) has been the compression of unit labour costs in Germany. In addition, we found that investment in software, and more broadly in intellectual property rights, has pushed up the rate of depreciation of productive capital in the French export sector. The gap in the consumption of fixed capital between the French and German export sectors also represents 5 points of value added.These divergences between France and Germany in export sector mark-ups net of capital depreciation are closely correlated with the two countries' market shares. Although it is difficult to pin down causality, this variable significantly improves the export equations, by capturing a part not explained by the indicators of price competitiveness. An increase of one point of value added in the net mark-up eventually leads to an increase in exports of 1% in France and 0.7% in Germany.Based on this equation, seven years after the supply-side policy were implemented, it would contribute to increasing France's exports by 1.9% and GDP by 0.6%. This estimate does not take into account the financing of the measures and macroeconomic feedback effects. A permanent reduction of 10 billion euros on production taxes would, all else being equal, boost France's exports by 0.6% over 5 years and GDP by 0.2% through foreign trade alone.

The pandemic crisis has displayed the lack of precautionary measures and health infrastructure in most advanced countries, not forgetting how little help has been granted to poor countries. In the face of a worldwide ecological crisis, there has been no global cooperation. In addition, in 2020, catastrophic events due to climate change have accelerated. Public finances have been called upon to support the economy and to engineer a much hoped-for short-term recovery on the one hand, and to put financial systems in order to deal with climate change in the coming crucial decade on the other.Our work tries to address this dual challenge. First, it handles the crucial problem of debt sustainability in a theoretical framework that emphasizes the discounted ratio of future primary balances rather than the level of debt. Simulations of the theoretical model used are provided for the four largest countries of the euro zone to show the conditions in which public debt could be sustainable during the crisis and the subsequent recovery.Moving to the longer-term challenge of handling climate change, societies must confront the irruption of climate-related risks that are plagued with radical uncertainty. To deal with this new financial landscape, the institutional structure of finance must be reformed. Furthermore, macroeconomic disequilibria are no longer symmetrical. The threat of a deflationary depression is far higher than inflationary risks. Consequently, central banks need to integrate macro-prudential and monetary policies and to collaborate with fiscal policy. The financial regulatory authorities are developing precautionary macroeconomic scenarios to induce private agents to report the ecological costs of their economic activity and then to reduce those costs under their monitoring.Strategic planning is indispensable for the financing of long-term infrastructure investments that receive insufficient finance from the markets. Three categories of actors stand out for the long-term restructuring of Europe's financial systems: first, the public development banks networked under a`np pagenum="080"/b reformed EIB; second, responsible long-term financial investors, who understand that economic damage from climate change negatively influences their long-run financial returns; and third, the European system of central banks that can account for the differentiated impact of climate change within the euro zone.

The inception of the euro allowed countries from the periphery to experience a large fall in the cost of borrowing. Lower nominal rates were only partially offset by lower inflation rates. We rationalize this real interest rate reversal using a two-region model of a monetary union where, consistently with real interest rate data, discount factors are initially heterogeneous, leading the periphery to be borrowing-constrained. We model the inception of the euro as a partial convergence process in inflation rates and a slow rise in the discount factor of the periphery, relaxing the borrowing constraint. This simple set-up accounts for the bulk of post-euro fluctuations in both regions. In particular, it replicates very well the observed joint dynamics of current accounts and terms of trade.