Three essays on the role of frictions in the economy.

Summary This thesis consists of three studies on the role of disagreement in economics. In the first chapter, I study the impact of judicial uncertainties on the role of disagreement in the financial market. I begin by documenting and defining these judicial uncertainties, in as much depth and detail as possible. The uncertainty related to the imperfect ability of regulators to observe is called the monitoring problem, and the uncertainty related to the penalty and enforceability problem. I introduce these concepts in a model with financial frictions. The simulation of the model shows us that the monitoring ability of regulators determines the stability or fragility of the banking sector. The cost of capital does not increase much in an economy with judicial uncertainties but the rate of return of the economy to the steady state decreases. For example, the rate of return of the economy to a steady state (after experiencing a medium-level external shock) lasts on average 7 - 12 quarters. I argue that this is due to changes in asset quality in the face of judicial uncertainty. Finally, I look at whether the simulated model could pick up the fluctuations of the business cycle after the financial crisis and it does so well. Furthermore, I provide detailed arguments for the analysis of welfare programs in the presence of judicial uncertainties. In the second chapter, I study the volatility due to disagreement in the labor market. I try to identify the sources of this high volatility in a structural way. Thus, I use a vector autoregression with stochastic volatility (Time Varying Parameter SVAR) to investigate the properties of job creation in the United States and their variations over time. The results show that a technology shock appears to explain less than 40% of the observed fluctuations in job creation volatility after the 1980s and indicate that volatility depends largely on demand and price shocks. Job vacancies (i.e., job creation) reacted negatively to technology shocks until the early 1990s. The same pattern is found for the recent period. This result is very important for public authorities because it calls into question the creation of jobs following new technologies. The third chapter is devoted to disagreement in the loan market where I show how bankruptcy law could intensify the moral hazard problem between a debtor firm and its creditors. This chapter tries to link bankruptcy law to the cost of capital by studying the level of demand for covenants in a contract. The hypothesis that I will try to validate empirically is the following: if bankruptcy law becomes more and more favorable to firms, creditors will put more and more restrictive clauses in the contract (i.e. seek to obtain a stronger control over the debtors' behavior). I validate the above hypothesis and show that an additional covenant decreases the rate of return by 23 basis points. Thus, I provide a new interpretation of covenants compared to the literature.