Report
Patrick Artus

What does liberal economics say about the functioning of companies?

We seek to determine the best way to obtain a change in the behaviour of companies, in the desired direction, by using the principles of liberal economics : The first problem is that of risk sharing between shareholders and employees; cyclical and corporate risks are increasingly borne by the employees, while the shareholders still receive compensation for the risk ; in a "liberal eco nomy", the employees should receive a compensation for the risk corresponding to the risk they take; The second problem is that of environmental and social objectives. To obtain, for example, a reduction in companies’ CO 2 emissions, a reduction in the use of short-term employment contracts, equal pay for men and women, etc., rather than regulations , it is better to use incentives that companies respond to in a liberal economy : price of CO 2 , bonus/penalty on short-term contracts or on gender pay differences. We use data concerning France to illustrate these different points.
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Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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