Assessing the Economic Viability of France’s Pension Reforms Using AJ-LF Models

Abstract

The article is dedicated to the analysis of the Pension reform of 2023 in France. At the time of April 2023 this topic was hotly debated; many politicians, sociologists, economists, and common citizens expressed their opinions about Emmanuel Macron’s politics. The article examines the underlying reasons, background, and public response to the reform, as well as its immediate and long-term effects, through an unbiased investigation by developing a macroeconomic model for goods and labor markets. But what makes the study unique in its essence is a non-standard usage of game theory techniques: dominant and dominating strategies, Nash equilibrium in pure strategies. This approach provides readers with a unique and unconventional perspective on the situation, enabling them to gain insight into the motivations behind the actions of various stakeholders and improve their overall understanding of the consequences following the reform. At the end of the work authors provide a critical assessment of President Macron’s actions and answers to the most intriguing questions: “Was the introduced reform inevitable?”; “Perhaps it would be best to repeal the legislation and halt everything right here and now?” “Should Mr. President and the Government take public opinion into account, or it would be better to purely trust the view of professionals and proceed with the current political vector?”