Michèle Tertilt

Michèle Tertilt researches credit markets, consumer debt and bankruptcy systems. The macroeconomist also asks whether women are better for development and looks at important decisions that affect an economy – those that are made within families.

Interview

Where do we stand in the fight against HIV?

A recent topic of interest for Tertilt is the relationship between sexual behavior and HIV.
Unlike other HIV studies, Tertilt’s model didn’t assume that people’s behaviour will be indifferent to policy changes. “You have to take into account changes in behavior,” she says. “Here’s where economics comes in.”

With knowledge about HIV at high levels in Malawi and other Sub-Saharan African countries today, Tertilt finds that ART will be a key driver to further reduce HIV. “The introduction of antiretroviral drugs is at pretty high levels now,” she says. “Fifty percent of the infected are treated. What we can show is that as soon as enough people are treated, ART becomes a very useful policy to reduce HIV.”

Women and money

The idea that giving family money to women makes good development sense, since they are more likely to invest that money in the outcomes of their children, which in turn will improve a country's economic growth, is behind many of the programmes run by organisations such as the World Bank and the UN.
Tertilt and her colleagues have examined this idea and found that the truth is not so straightforward and that the outcome of such programmes is country-dependent. If a country is short on physical capital, rather than human capital, then the male pattern of spending on investment goods and saving for the future is more useful.

The democratisation of credit

The introduction of credit scoring made it cheaper for banks to target loans better and within 20 years, the number of US Americans with a credit card rose from 40 to 70 percent. However, this also led to the rise of bankruptcies in the 1980s: “If new types of people, riskier people borrow, then they will also default at higher rates".

In this context, Tertilt and her colleagues have also looked at the US 'Fresh Start' system where it is possible to declare bankruptcy and then start with a clean slate the next day. In countries such as the US, where there is less welfare state provision, this can act as an important safety net. On the downside it also leads to higher interest rates, which reduces the length of time people are able to spread their debt across.