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Presentation

[Philippe Aghion]

The Center for the Economy of Innovation, established at the Collège de France by Professor Philippe Aghion, receives support notably from Paris Sciences et Lettres (PSL) within the framework of the Institutions, Innovation and Sustainable Development program (IISD), and funding from the Banque de France. Two types of activity are being developed there:

Research

Funding awarded by PSL pays for two research assistants and finances the acquisition of databases.

The main projects developed in 2016-2017:

  • Taxation and small entrepreneurs

This project assesses the effect of successive changes in the French tax system aimed at promoting microbusinesses and small entrepreneurs. Under the leadership of Professor Aghion, Stefanie Stantcheva (Harvard University) and students are developing a new method for calculating the reaction elasticity of economic agents in response to reforms introduced in 1999 and 2008.

  • Exports and Innovation

This study, carried out with Marc Melitz (Harvard University) and two of Professor Aghion’s students – Antonin Bergeaud and Matthieu Lequien – analyzes the effect of the expansion of export markets on innovation in French exporting companies. It shows in particular that higher export demand gives rise to a market size effect, which leads to increased innovation, especially for firms positioned far from the technological frontier in their respective sectors.

  • Measurement of Growth

This study, conducted with Pete Klenow (Stanford University), shows that productivity growth (in real terms) in the United States is inaccurately measured since statistical agencies do not adequately account for the contribution to global inflation in the economy of new products which add to – or replace – old products. Statistical agencies often use imputation or extrapolation: in other words, for each sector of the economy, the statistics agency relies on prices of products which are not replaced by new products to infer the rate of inflation for the economy as a whole. This study shows that the use of imputation leads to an underestimation of real productivity growth in the United States of approximately one point per year for the last thirty years.

Educational outreach – the Innovation Campus for high schools

As part of a partnership between the Ministry of Education and the Collège de France, Professor Aghion has designed an Innovation Campus to allow high schools (and in particular technical high schools and establishments in deprived areas) to have access to teaching via research and Collège de France professors. The program started off with economics, in association with a schedule of regional visits undertaken by Professor Aghion.

This program could not have been developed without the partnership with Paris Sciences Lettres and support from BNP PARIBAS bank, SFIL and the AXA group.