Philippe Martin: The Legacy of a Leading Economist

Philippe Martin, Professor at Sciences Po within the Department of Economics and Dean of the School of Public Affairs, passed away in December 2023. He will be deeply missed at Sciences Po but also by the research community in economics as a whole – in particular at the CEPR, the CAE, the AFSE…

We wanted to share a few words from some of his closest colleagues and a look back at his invaluable research work by two of his co-authors and Sciences Po colleagues, Nicolas Cœurdacier and Thierry Mayer.

A true hero to the research community

José De Sousa, Professor at Pantheon-Assas university, gave a tribute to Philippe Martin on the French Economic Association (AFSE) website. He recalled that “his ability to simplify and present complex and sophisticated reasoning in an accessible and intuitive way was both remarkable and inspiring". An avid reader of his columns for the newspaper Libération, Pr. De Sousa frequently included them in his teachings ”to illustrate the relevance of applied economics", for instance “The bitter cost of coffee” ("Le coût amer du café" in French) or “Behind the scenes of the ‘Made in France’ label" ("Les dessous du 'made in France’" in French). He worked with Philippe Martin, Nicolas Berman and Thierry Mayer on the article Time to Ship During Financial Crises, in which they showed that delays in the delivery of goods around the world exacerbate the impact of financial crises on trade.

The Centre for Economic and Policy Research (CEPR) considers Philippe Martin to be a “true CEPR hero”. He wasn't only CEPR's Vice President for Europe but also a Research Fellow in three programmes – International Macroeconomics and Finance, International Trade and Regional Economics and Macroeconomics and Growth – as well as a member of four Research and Policy Networks. The CEPR set up a page to collect tributes, 46 have already been published. Some of his closest colleagues and co-authors got involved to honour his memory.

Nicolas Cœurdacier, a fellow Professor of Economics at Sciences Po, praised his “tireless support to young researchers and his commitment to passing on his knowledge and experience to his students, with remarkable pedagogy”. Pierre-Olivier Gourinchas, Research Director and Economic Counsellor at the International Monetary Fund, and Hélène Rey, Professor of Economics at London Business School, consider themselves lucky to have been his co-authors. They describe his work “on trade and wars, economic geography and public policies, globalisation and financial crises, European policies, exchange rates and trade” as “extremely creative and influential”.

Sciences Po's Department of Economics also contributed to this moving tribute to their first chair, from 2008 to 2013, that ensured their astonishing development by “mixing the best international practices with a certain creativity in the design of the department”.

Philippe Martin's work in 3 key ideas

Thierry Mayer, a close colleague at the Department of Economics and co-author, recalls on the CEPR website that Philippe Martin combined “three qualities almost never found jointly in an economist”: 1) a good dose of self-doubt, 2) being able to change one’s mind, 3) and a capacity to realise that there are other things in life than research. Nicolas Cœurdacier and Thierry Mayer summed up for us the main areas of Philippe Martin's academic work.

Questioning geographic economy

In his PhD and ensuing early work, Philippe Martin focused on economic geography. He simplified and adapted Paul Krugman's “new economic geography” main theoretical insights – how mobility of goods, workers, and capital shape manufacturing and population spatial agglomeration. The innovation to the original model was to allow for firms (tied to capital units) to optimally choose locations, while returns to capital are being redistributed to their owners, themselves immobile. This model, later referred to as the “footloose capital” model, makes the analysis of agglomeration patterns much more tractable than the original Krugman approach. It enables to work with simple and elegant analytic results, and therefore extend the analysis to new topics. 

He applied his model to two main new questions. First, what is the impact of the agglomeration of activities, of increased clustering on the overall growth of a country? Is there more growth to be expected in a country more centralised around its capital like France, or in Germany where activities are more dispersed? Is a virtuous loop created between clusters and growth? Second, can public policies reduce the spatial disparities in income that naturally emerge between the centre and the periphery, and should they? When aiming to reduce inequalities, should the spatial dimension be taken into account? Should equity between people or their territories be prioritised? Is building infrastructures, such as a new highway from the centre to the periphery, the most efficient way to rebalance inequalities?

This stream of research (elaborated with many co-authors during his initial years in Geneva and Paris, most notably Richard Baldwin, Rikard Forslid, Gianmarco Ottaviano and Frédéric Robert-Nicoud) was synthesised in the book Economic Geography and Public Policy (Princeton University Press, 2003) and The Economics of Clusters: Lessons from the French Experience (Oxford University Press, 2010).

Is globalisation a factor for peace?

Philippe Martin worked with Thierry Mayer and Mathias Thoenig (from Lausanne University) on a series of articles studying the impact of trade integration on military conflicts between states. They showed that the key factor on whether trade is peacemaking is the geography of countries’ international trade. The main factor is how existing trade patterns shape the interdependence between the conflict-prone countries.

In their papers, they dwelled on what would happen if for example India and Pakistan were forced to trade, if the European Union was destructed, or if Rwanda and Burundi were trading more with one another and less with Europe? In all those cases, they highlight that trade with long-distance partners act as an insurance in the case of a military conflict, which is essentially a short distance phenomenon over the last 70 years.

Economic policy choices linked to multilateral or regional trade liberalisation need to be rethought, taking into account that the changes in spatial patterns of economic interdependence have (unintended and largely overlooked) consequences for international security, which affects the final balance of benefits of the large wave of globalisation observed since the end of the 1970s.

To learn more on this topic, you can read the articles: "The geography of conflicts and free trade agreements" (American Economic Journal: Macroeconomics, 2012), "Civil wars and International Trade" (Journal of the European Economic Association Papers and Proceedings, 2008), "Make Trade not war?" (Review of Economic Studies, 2008).

Mixing financial and trade globalisation

Along with co-authors such as Hélène Rey and Nicolas Cœurdacier, Philippe Martin studied the costs and benefits of financial and trade globalisation. He found that trading financial assets internationally can foster financial instability in emerging countries, which are not very open to trade in goods. Some countries have liberalised their markets for goods but not their capital markets, others choose to protect their industry with tariffs and other custom barriers but allow a free flow of assets. The research addresses how policies regarding globalisation should be articulated to preserve financial stability and avoid financial crises.

To learn more on this topic, you can read the articles: "Globalization and Emerging Markets: With or without Crash?" (American Economic Review, 2006), "International portfolios with supply, demand and redistributive shocks" (University of Chicago Press, 2009), "The geography of asset trade and the Euro: Insiders and outsiders" (Journal of the Japanese and International Economies, 2009), "International portfolios, capital accumulation and foreign assets dynamics" (Journal of International Economics, 2010).

It is also to be mentioned that Philippe Martin wrote a very large number of research-driven policy pieces. Most notably at the Conseil d’Analyse Economique (CAE), he wrote about an incredibly large number of topics, ranging from the reform of the international monetary system, to taxation of multinational firms, youth unemployment reduction programmes or consequences of stopping energy imports from Russia. The scope of Philippe’s research interests had only one limit: it should also be useful to society, outside academic circles.