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INSIDE Project (Insights on Immigration and Development)
INSIDE is an independent, non-partisan initiative launched by the Institute for Economic Analysis (IAE, CSIC). We aim at mobilizing and coordinating the research community contributing to the understanding of the causes and consequences of migrations. Special emphasis is also placed on the study of key aspects of economic development and growth of poor countries.

Our mission is to promote research and coordinate the efforts from researchers belonging to different institutions in view to contribute to the public debate on immigration and development issues.

Our interests include macro and microeconomic research, theory and empirics. We are committed to high standards of research.

Firm behavior under government policies: the interaction of credit markets and labor markets in shaping economic performance
ECO2016 76734-P , Ministerio de Economía, Industria y Competitividad
Ana Rute Cardoso, Hugo Rodríguez, David Card, Paulo Guimaraes, Lous-Philippe Morin, Benjamin Olken, Dina Pomeranz

This project focuses on the interaction between firm behavior and government policies, and aims at improving our understanding of the drivers of economic performance. Its core contribution is to bring the firm to the forefront of the analysis, progressing from the previous literature in labor economics, international trade, or emigration, which most often assumed that firms are homogeneous. In particular, we will consider two specific types of government policies that may affect firm behavior: labor market regulations and financial market regulations . Both policy areas have recently witnessed major changes and intense controversies. Financial market regulations crucially determine firms' access to capital , whereas labor market regulations, such as minimum wages and collective bargaining, as well as compulsory education laws, crucially determine firms' access to labor -- beyond its quantity, its quality and price.

We are interested in a broad set of outcomes and will address the following questions:
1) What is the impact of firm access to credit on labor contracts?
2 ) What is the role of firm-to-firm job mobility in shaping workers' lifecycle earnings profiles? Do men benefit more than women from job mobility?
3 ) Are there spillovers of education at the firm level?
4 ) How do minimum wages impact workers' careers? Does collective bargaining hamper economic adjustment and will recovery from the crisis require the dismantling of the European wage setting model?

Emphasis will be placed on empirical microeconomic modeling and task 1 will provide as well theoretical modeling from a macroeconomic perspective.

"Costly Consumer Search and Privacy Online Markets"
ECO2015-74328-JIN, Ministerio de Economía, Industria y Competitividad
Vaiva Petrikaite,

The project will investigate the aspects of online retail markets, determined by seller's and buyer's new incentives and instruments. The analysis will encompass the main aspects of e-commerce by studying costly consumer search, targeted advertising and consumer privacy issues. Thus, the study will provide with a coherent integrated online market analysis that will be used to identify necessary economic policy measures leading to more effeciend digital markets and consumer privacy protection.

"Policy Intervention in Social and Economic Networks"
ECO2015-67171-P, Ministerio de Economía y Competitividad
Esther Hauk, Sjaak Hurkens, Enriqueta Aragonés, Orestis Troumpounis, Facudno Albornoz-Crespo, Doh-Shin Jeon, Dimitrios Xefteris, Andrea Lanteri

In this project we propose to analyse social and economic networks with the aim of studing how policy intervention may solve their shortcomings. We focus both on specific and currently relevant applications such as the digital markets, as well as on more general issues about the functioning and economic consequences of social and economic networks. The ultimate goal of this project is to guarantee optimal levels of social welfare in all those environments where social or economic networks play a role. Therefore, our main interest would be to characterize the main efficiency problems caused by the existence of networks, to design specific measures of policy intervention and regulations that may overcome this shortcomings, and finally to characterize the features of the political instutions that may guarantee the correct implementation of the designed policies.
With this aim we have structured the contents of the project in two research lines:
1) Social and economic networks, where we analyze its functioning and detect its possible inefficiencies
2) Political institutions and optimal policies, where we design policy intervention and its strategic implementation
Both research lines consist of several subprojects. The first research line attempts to integrate the social preference literature with the social network literature with the aim of understanding the effects of the networks features on social welfare. It also studies market competition with strong network effects in a particular application: the digital market. The second research line proposes a new equilibrium concept in order to study optimal policy, examines the effect of corruption on the society's policy preferences and analyzes a number of political institutions according to their social and economic effects on society's welfare

"Culture and Social Conflict"
ECO2015-66883-P , Ministerio de Economía y Competitividad
Laura Mayoral, Joan M. Esteban, Hannes Mueller Timothy Besley, Massimo Morelli, Joachim Voth, Gilat Levy, Dominic Rohner, Christopher Rauh, Debraj Ray

The general research theme of our project is the interaction between culture/religiosity, social conflict and political instability. We have set to ourselves three goals: (i) to study in greater depth the two-way relationship between culture and conflict, (ii) to have a richer understanding of the drivers of conflict, with emphasis on the difficulties to reach prior agreements, and (iii) to obtain measures of political risk that allow us to anticipate the onset of violence.
Our first research line focuses on the bidirectional relationship between culture and conflict. Culture is a mechanism that transmits behavioral norms from generation to generation. As situations of extreme violence can alter these norms, the effect of conflict in a society can be perpetuated through cultural transmision.
The second set of issues studies the determinants of conflict onset. First, we consider two independent sets of reasons of why it turns out to often be imposible to reach an agreement. One explanation we offer is that it might me imposible to satisfy the participation constraints of all the potential coalitions threatening peace. Our second explanation wants to develop a model in which 'just' agreements turn out to be an incentive for an even more violent conflict. We characterize sharing rules that lead to peaceful agreements.
In the third set of issues considered we turn to the economic consequences of conflict and weak political institutions. This line of research first aim to develop an empirical method to predict civil wars. The prediction uses several hundred thousand articles from English-speaking newspapers and an unsupervised learning algorithm to generate topics from these texts. These topics are then used to predict instability out of sample. Finally, the project analyses the effect of weak law and order enforcement, which is often found in fragile countries.

"Innovación e Información en la Economía Digital"
201612006, Fundación BBVA- Ayudas a Equipos de Investigación Científica
Matthew Ellman, Roberto Burguet, Sjaak Hurkens, Vaiva Petrikaite, Fabrizio Germano, Tomás Rodriguez-Barraquer

Does the large and growing digital footprint in modern life simply reflect a shift to conduct social and economic interactions in a lower cost medium, or do the new technologies and greater interconnection bring fundamental changes in how people interact? This project seeks answers by building a series of models, based on reduced costs of storage, processing and transfer. In the first line, we focus on how social networks, search engines, advertisers and low cost publishing and distribution affect the quality of the news that gets produced and consumed. In the second, we investigate the use of digital algorithms to support work and innovation via crowdfunding. In the third, we study firms' incentives to accumulate information about people to target advertising and gain a competitive advantage.

"Experimental Economics, Two-sided Markets and Subjective Well-being"
ECO2014-59302-P, Ministerio Economía y Competitividad
Jordi Brandts, Flip Kliin, Ada Ferrer, Jose María Ortíz, Joana Pais, Péter Biró, Markus Walzl, Bettina Klaus, Klarita Gerxhani, Arthur Schram, David Cooper, Enrique Fatas

The project brings together three research lines in the field of microeconomics:
1. Experimental studies on economic and social issues
2. Experimental and theoretical studies on two-sided matching markets.
3. Welfare and the social and economic context.

The studies in this project aim at world-class research that will contribute to the international literature by pushing forward on the frontier of knowledge. Both, the experimental and the questionnaire based evidence will allow us to obtain a more complete view of social life, as well as to establish bridges between economics and other social sciences like psychology and sociology.

"Frictions and Failures in Old and New Markets"
ECO2014-59959-P, Ministerio de Economía y Competitividad
Ramon Caminal, Roberto Burguet, Matthew Ellman, Vaiva Petrikaite, Lídia Farré

This project contributes to the analysis of interaction among individuals at a microeconomic level in the presence of frictions and group determinants. As such, it is part of the effort to bring the classical microeconomic model of a frictionless economy closer to the complexities of reality.
The project is divided in four sections:
- 1st section deals with open questions inside the classical framework of industrial economics.
- 2nd section focuses on online transactions and the issues specific to that vehicle of interaction.
- 3rd section will be devoted to the study of the effects of social determinants on individual choice and behavior
- 4th section will consider interactions not necessarily mediated by prices, subject to relational frictions. Issues pertaining to this category include the spillovers from intra-group decisions onto inter-group decisions, the design of procurement rules in front of corruption, the endogenous selection of members in problems of team formation, or the use and consequences of crowdfunding as a mechanism for financing new projects.
These four sections cover a wide thematic spectrum, and constitute a coherent research project organized around a unified methodological approach and the common theme of frictions in the economic interactions of individuals. The project includes theoretical and empirical work, and will help clarify open questions in the frontier of economic analysis

"Integrated Macro-Financial Modelling for Robust Policy Design"
MACFINROBODS, FP7-SSH-2013- 2 GA 612796, European Commission
Albert Marcet, Esther Hauk, Omar Licandro, Sarolta Laczo, Nezih Guner, Juan Carlos Conesa, Joan Llull y Francesc Obiols. Other institutions participant: University of Amsterdam (Project Coordinator), Centre Pour La Recherche Economique Et Ses Applications (CEP)
During the global financial crisis and ensuing Great Recession, economists at policy-making institutions had little choice but to augment macroeconomic models with ad-hoc assumptions and adjustments in order to provide analysis and advice for policy makers. Our consortiums proposal aims to move policy-focused macroeconomic modelling beyond this approach to the endogenous modelling of the dynamics resulting from financial risks and related decision making in banks, households, firms and public institutions. We bring together four broad lines of research to systematically develop new behavioural and institutional building blocks, integrating them in policy-focused macroeconomic models and using these models in a new framework for policy evaluation. In terms of building blocks, one line of research moves beyond the assumption of representative and homo-oeconomicus-type agents to incorporate micro-behavioural realism in decision making, while a second line of research advances the modelling of financial institutions, their fragility and the dynamics of systemic risk. The third line of research integrates these new building blocks (including a selection of those developed by researchers outside the consortium) in a new generation of policy-focused macroeconomic models. In parallel, in the fourth line of research new policy evaluation tools are developed, with a focus on robust tools aimed at containing financial contagion and boom-bust cycles, maintaining fiscal sustainability and coordinating monetary, fiscal and regulatory policies in normal and crisis regimes. The consortium comprises researchers with a strong track record in advancing the frontier on behavioural and institutional modelling, highly influential macroeconomic modellers as well as seasoned veterans of model-based monetary, fiscal, and regulatory policy evaluation and design. Consortium members have strong academic backgrounds as well as substantive practical experience at policy-making institutions.

"Tecnología, Capital Humano, Innovación y Comercio"
ECO2013-48884-C3-1-P, Ministerio de Economía y Competitividad
Omar Licandro, Joachim Jungherr, Fernando Del Rio, Eduardo Giménez, Miquel Pérez-Nievas, Antonio Rodríguez Sampayo, José Ramón Ruiz

The aim of this project is to contribute to the understanding of the processes of technological innovation and capital accumulation in a global economy. Technology interacts with the investment decisions taken by households, firms and governments over the accumulation of physical and human capital, and the management of natural resources, the labor force and population growth. This interaction occurs in a global environment opened to international trade and international capital and labor flows. All of these processes are of interest for the Convocatoria de Excelencia del Plan Nacional de I+D, and at the core of some of the Challenges of the Spanish Strategy of Research 2013-16 (Challenge 6 and part of Challenge 5).
To better understand the aforementioned processes our goal is to construct economic models that incorporate those features, and test the models empirically. We target models of i) sustainable growth; ii) inequality, poverty and growth; iii) demography and fertility, iv) international trade and finance, v) competitive search and bargaining, vi) employment and business cycle, vii) technology adoption and vintage capital, viii) energy use and non-renewable resources. The results obtained with these models will allow us to make recommendations for macroeconomic policy. We will consider applications of many of these models not only to the global economy but also to the Spanish economy and the EU.

"The Macroeconomic Implications of Heterogenous Firms"
2014 SGR 1432, Generalitat de Catalunya
Omar Licandro, Joachim Jungherr, Francesco Cerigioni, Dmitry Matveev

Within the general framework of the empirical and theoretical literature on firm dynamics, its applications to trade, on firms' financing choice along the business cycle, the dynamics of employment and occupations, the history of longevity and migration, the welfare implications of output growth measurement and endogenous fertility, and on the relationship between bank opacity and financial stability, the research of the group will cover the following issues:

1. The dynamics of Spanish manufacturing firms
2. Real Exchange Rate and Export Behavior of Firms2
3. Dynamics of Firm Dynamics
4. Occupational Obsolescence
5. Longevity and Migration in Human History
6. The Welfare Implications of GDP Growth
7. Capital Structure, Uncertainty and Macroeconomic Fluctuations
8. Bank Opacity and Financial Stability

"Macroeconomia teòrica i aplicada"
2014 SGR 1446, Generalitat de Catalunya
Albert Marcet, Angel de la Fuente, Hugo Rodríguez, Sarolta Laczó, Albert Sánchez

The research of the group will focus on five major topics:

1. Formation of expectations. Rational expectations (RE) are replaced by the Internal Rationality (IR) approach that includes a learning algorithm consistent with the optimal behavior of the agents.
2. Volatility of asset prices. IR models will be applied to explain the apparent excess variability in the price of certain assets.
3. Fiscal policy. The optimal portfolio of debt will be analyzed and the implications of consistent temporarily fiscal policy. We quantify the results of the regional financing system at a national level.
4. Monetary policy. We will employ the IR approach to this policy. We will analyze the implementation of monetary policy during financial crises.
5. Economic growth. The links between education and economic growth will be studied. We will analyze the statistical quality of education indicators and the impact of the quality and quantity of education on the level of income and productivity of countries.

"Microeconomia teòrica i aplicada"
2014 SGR 510, Generalitat de Catalunya
Roberto Burguet, Jordi Brandts, Ramon Caminal, Matthew Ellman, Sjaak Hurkens, Jose M Ortiz

The research will cover organizational economics. This includes transactions that take place inside the firm. We will pay particular attention to issues referring to manager-employee relationships, particularly the effects of several factors (legitimacy, employee assignment, group composition, etc.) on the feasibility of cooperation. It also includes transactions that take place outside the boundaries of the firm. We will study issues related to bilinguism, media subsidization, or service externalization.
The research will also cover topics on the economics of market mechanisms, with a focus on industries characterized by the need of coordination or centralization, typically due to the existence of externalities or an essential facility. This includes analysis of telecommunication or energy markets or the internet.
Finally, we will contribute to classical themes in industrial economics, with the study of issues like bundling, the dynamics of consumer preferences, or procurement.

"Social Unrest, Migration and Inequality"
2014 SGR 1414, Generalitat de Catalunya
Ada Ferrer, Ana Rute Cardoso, Joan Esteban, Laura Mayoral, Guillem Pons, Adrian Pino

This research proposal aims at contributing to the understanding of the causes of social unrest, focusing on economic and ethnicity diversity. The research will be based on both theory and empirics. The project can we divided into the six parts: (i) study how the economic conditions of a society and its ethnic composition may interact to precipitate internal conflict; (ii) examine the link between inequality and status seeking and how this affects individuals' welfare perceptions; (iii) assessing the inequalities in the labor market, in concrete, looking at the impact of firm dynamics and labor market institutions on the returns to education, the gender pay gap, and labor market inequality; (iv) explore further immigrant locations and native residential preferences in Spain; (v) build a theory of migration where in some development stages immigrants are an essential mean to increase the natives' welfare; and (vi) contribute to the econometric literature of instrumental variables.

"Economia Política"
2014 SGR 1064, Generalitat de Catalunya
Enriqueta Aragonès, Josep M. Colomer, Hannes Mueller, Esther Hauk, Flip Klijn, Clara Ponsatí, Jan Zapal, Benjamin Tello

This research group focuses on the relationship between economics and politics. On the one hand, we work on the application of economic analysis to political issues, that is, we use the analytical tools that have been developed mostly by economists that have been adopted to study issues that traditionally belong to other disciplines, specially political science. On the other hand, we study the relationship between economic structures and decisions with political and public institutions. In particular, we analyze the possibilities of reform for political and public institutions, for electoral and voting rules, federalism, institutional design, turnout, electoral strategies, economic growth, inequality. The aim of this research group is both theoretical and applied.