Work in Progress


Debt Callability and Firm Dynamics
Updated draft coming soon
February 2024

Callable debts have reached a high share in corporate finance structure in the U.S. debt market. This paper studies the dynamic interplay between corporate bond callability and firm decisions. Using a comprehensive dataset spanning both firm and bond-level data, it unveils that small firms with constrained liquidity and lower credit ratings are more inclined to issue callable bonds. I develop a quantitative firm-dynamics model to jointly study firms' investment choices, callable debt composition, and decisions on calling bonds early. I show that callable bonds are favored by smaller, less productive firms due to their potential to enhance issuer value and mitigate default risk. As firms grow, the propensity to issue and call these bonds decreases. The study further demonstrates that callable bonds provide firms with strategic flexibility to refinance, particularly when interest rates decline, thereby underscoring the nuanced impact of callable debt on corporate finance and the macroeconomy.

Conferences and Seminars: University of Montreal, Federal Reserve Bank of St. Louis, 2023 Annual Meeting CEA, 2023 CEA Graduate Poster Session, 2022 SCSE, 2022 17th CIREQ Ph.D. Students Conference, Quebec Social Sciences Ph.D. Students Seminar



Monetary Policy Narratives and House Price Expectations with Firmin Ayivodji
Updated draft coming soon
October 2023

This paper examines the impact of Central Bank narratives on house price expectations using a unique dataset from three different textual sources: direct central bank communication (monetary policy reports and speeches), newspaper articles, and Twitter posts. Leveraging advanced computational linguistics and machine learning techniques, we analyze the narrative tone in monetary policy reports, speeches, news articles, and tweets related to the monetary policy decisions of the Bank of Canada (BoC). Our findings reveal that narrative sentiment expressed in these sources significantly shapes expectations for future house prices. Furthermore, we observe that sentiment related to credit, financial conditions, and housing narratives holds considerable predictive power in shaping house price expectations. Additionally, we employ deep learning methods to extract information specifically related to the forward-looking aspects of sentiment in monetary policy narratives. These results highlight the pronounced impact of forward-looking narrative sentiment on house price expectations. The study suggests that social and news media can serve as valuable tools for central banks in managing economic expectations, with significant implications for the housing market.



Publications (Before Ph.D.)


Twin Deficits : Empirical investigation for Togo
Forthcoming, 61st World Statistics Congress Proceedings
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Abstract

This paper investigates the hypothesis of twin deficits in Togo. There is a great economic debate about the twin deficits hypothesis which indicates a positive relationship between the current account deficit and the fiscal deficit resulting from changes in tax revenues or government expenditures. The presence of this link is rarely tested for developing countries. To examine the twin deficits in Togo, I use a Vector AutoRegression (VAR) framework, based on time series from the period 1975-2015. I find a unidirectional causality from the fiscal deficit to the current account deficit and this reveals the presence of twin deficits in Togo and also conformity with the Keynesian approach (conventional view).



Policy Papers


Reformer l’Enseignement Technique et de la Formation Professionnelle pour l’Employabilite des Jeunes en Afrique
L’Afrique Des Idées, 2018
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Abstract

Étreintes par le sous-emploi et le chômage des jeunes, les économies africaines devront réinventer leur système éducatif. Si le débat n’est pas nouveau, notamment en ce qui concerne le rôle de l’éducation dans la formation du capital humain, ses termes devront avancer en incluant les spécificités de la formation professionnelle. Les structures des économies et les bouleversements externes repositionnent la question de la formation pour l’emploi dans un contexte totalement rénové où le privé, l’informel, le numérique ont une nouvelle résonance. Bien entendu, le chômage des jeunes est sous tension, notamment parce que (i) un point de croissance économique ne génère que 0,4 point d’emplois en Afrique, (ii) moins de 16% des formations dans le supérieur constituent les formations dites « STEM», et (iii) seulement 15% du budget de l’éducation est consacré à la formation professionnelle. Cependant, la jeunesse la plus entreprenante du monde est en Afrique. Elle constitue 69% de la population, et ensemble avec le potentiel du numérique, offre des marges réelles de transformation de la dynamique de l’emploi en Afrique.