Projects

Current projects | Past projects

INSIDE Project (Insights on Immigration and Development)
http://www.inside.org.es/
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.

"Training and Mobility Network for the Economic Analysis of Conflict" (TAMNEAC)
FP7-People-2010-ITN, European Community
2011-2014
IAE-CSIC Coordinator: Joan M. Esteban, DIW Berlin (Project Coordinator), Institute of Development Studies, Univ. Libre de Bruxelles, Oxford Policy Management Limited, Planet Guarantee, Consejo Superior de Investigaciones Cientficas, Institut for Fredsforskning Stiftelse, Humboldt U. Berl

The overall objective of the Training and Mobility Network for the Economic Analysis of Conflict (TAMNEAC) is to train a young generation of professionals and researchers in tackling the challenges associated with mass violent conflict in developing countries. This training will range from rigorous research methods to knowledge-based policy responses and program implementation in conflict-affected countries.

TAMNEACs research will contribute to our understanding of the causes, processes, interactions of mass violent conflicts, as well as on the short- and long-term impacts that they have on individuals, households, communities, and states. This will effectively allow the linking of micro-level interactions that take place before, during, and after the outbreak of violent conflict with macro-level political processes. Recent outbreaks of violent conflict have put a strain on the European Unions ability to engage effectively. In the future, the European Union will attempt to develop its capacities to anticipate and react to such conflicts, as outlined in the European Commissions Instrument for Stability Strategy Paper 2007-2011. When considering challenges such as climate change, population growth, or the unequal exploitation of natural resources, the global potential for conflict will only increase, as will expectations upon the European Union to mediate and to prevent cycles of violence. TAMNEAC will play an important role in addressing these challenges.

"Integrated Macro-Financial Modelling for Robust Policy Design"
MACFINROBODS, FP7-SSH-2013- 2 GA 612796, European Commission
2014-2017
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.

"Tecnologa, Capital Humano, Innovacin y Comercio"
ECO2013-48884-C3-1-P, Ministerio de Economa y Competitividad
2014-2016
Omar Licandro, Joachim Jungherr, Fernando Del Rio, Eduardo Gimnez, Miquel Prez-Nievas, Antonio Rodrguez Sampayo, Jos Ramn 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.

"Fiscal and Monetary Policy and Financial Markets"
ECO2008-04875, Ministerio de Ciencia e Innovacin
2009-2014
Albert Marcet, Sarolta Lacz, Alessandra Bonfiglioli, Jess Fernndez-Huerta, Davide Debortoli, Ester Faia, Juan Pablo Nicolini, Klaus Adams, Marek Jarocinski
Our objective is to study the efects of fiscal and monetary policy in dynamic stochastic models with microfoundations. We introduce various kinds of financial market imperfections. In some studies we impose rational expectations and in other we assume learning about expectations. We also study empirically the issues at hand and design some econometric tools for this purpose. The topics under study are:
- Fiscal and Monetary Policy
- Financial Markets
- Econometric Models of Business Cycles
- Human capital, inequality, immigration and welfare state


"Social Polarization and Conflict: Models, Estimation, Evidence"
ECO2011-25293, Ministerio de Ciencia e Innovacin
2012-2015
Laura Mayoral, Joan Esteban, Francesco Fasani, Laia Balcells, Andrew Gianou, Alessandra Conte, Debraj Ray, Mateo Cervellati, Massimo Morelli, Dominic Rohner, Kalyvas Stathis, Ana Arjona

The project deals with the determinants of societal conflict as an outcome of rational behaviour, combining formal modelling with empirical testing of the implications of the models. In the ongoing research by Joan Esteban, Laura Mayoral and Debraj Ray we define a general model of conflict that provides a framework where one can accommodate the key role of non-material aspects often present in civil conflicts. These aspects are the payoffs other than direct private benefits(fighting for a cause) and the concern for the fate of the group, involving (partially) altruistic behaviour. This is an empirically testable model that in addition facilitates an organized way of thinking about the different issues involved in inter-group conflict that constitute the core of this research project. We will use this framework as a thread that organizes most of the research plan. This general model suggests two features that appear to be key in explaining the nature of conflict and its correlates: what the group is fighting for and the level of group cohesion. Following these two leads, we shall first develop different questions associated with the groups objectives and how are they set, and next we will develop various determinants of group cohesion. How the objectives are set, how mutual concern and differentiation from the others can develop, what are the trade-offs between homogeneity and heterogeneity within groups? Finally, we will discuss the problem of civil conflict between groups in a framework of repeated interaction.

Every question addressed combines modelling with empirical tests. Empirical work on this topic poses two complex problems. One is the scarcity and quality of the data. For instance, the ethnic or religious composition of many countries is not known or the data are extremely unreliable. The second issue is methodological: the nonlinear models typically employed to estimate conflict probabilities are subject to a number of problems that difficult the estimation strategy. This research project will take these issues very seriously and will devote a significant amount of resources to adequately dealing with them.

Besides the scientific contribution of our project, the results obtained will be useful for a rigorous study of some pressing issues relevant to Spain. We are observing a marked process of dilution of the social cohesion driven by an increased income inequality and the large influx of immigrant population. The understanding of the role of ethnic, religious and/or economic polarization in the creation of social unrest may permit to adapt the institutions for a harmonic channelling of the increasingly different attitudes and social priorities.

"Contracts, Negotiations, and Markets"
ECO2011-29663, Ministerio de Ciencia e Innovacin
2012-2014
Roberto Burguet, Ramon Caminal, Matthew Ellman, Ldia Farr, Ben Ner Avner

This project deals with individuals interactions and exchange in negotiations, contracts and markets. First, the project will contribute to contract theory and in particular to the analysis of the relationship between formal and informal contracts. It will extend this study to other situations where the trade-off between formality and informality is an issue. Second, the project will contribute to the study of negotiation and renegotiation, both from the conceptual point of view and in particular settings. In this sense, we will analyze endogenous mergers and option contracting under renegotaition. A third goal is to analyze issues both in contract theory and in negotiation theory that affect public policy. Here we will deal with the analysis of bribery, accountability and subsidies. Finally, we will continue analyzing problems of market behavior from the microeconomic point of view, including product variety, loyalty reward, or labor substitution. The project will contribute with theoretical concepts, applied analysis and also empirical test of hypothesis and measurement.

"Economic Growth and Public Policies (4)"
ECO2011-28348, Ministerio de Ciencia e Innovacin
2012-2014
ngel de la Fuente, Marcelo Soto, Francesca Rondina, Mara Gundn

This project analyzes the determinants of economic growth in two samples of economies, the Spanish regions and the member countries of the OECD, within the framework of modern growth theory, with special attention to the role of human capital and public investment policies. It also covers the construction of historical series of certain economic and demographic regional aggregates and the analysis of some issues related with public finances in the autonomic state, with the role of external aid in the development of LDCs and with policy design in the presence of model uncertainty. The issues to be studied include the private and social returns to investment in education, the impact and effectiveness of regional policies, the determinants of investment and job creation, the design of the regional financing system and the territorial implications of the public budget, the contribution of foreign aid to the development of poor countries and the role of private agents' expectations in the design of robust public policies. The results will be of interest to policymakers, especially those with responsibilities in the areas of regional and growth policy.

"Studies on Two-Sided Matching Markets and Subjective Well-Being"
ECO2011-29847, Ministerio de Ciencia e Innovacin
2012-2014
Flip Klijn, Ada Ferrer, Bettina Klaus, Markus Walzl, Joana Dantas Vaz Pais

The first research line will consist of a number of theoretical and experimental studies on various aspects of two-sided matching markets. The research can be summarized in five topics. Three topics deal with centralized markets: (i) normative study of conditions under which school choice mechanisms satisfy consistency and converse consistency, (ii) experimental study of the performance of a school choice mechanism in a hybrid model with so-called exam schools and regular public schools, and (iii) experimental study of the impact of information flows on the performance of school choice mechanisms and its robustness with respect to varying preference intensities. The other topics deal with decentralized markets: (iv) equilibrium analysis of decentralized matching markets with an exogenous termination time (for transactions) and (v) study of coordination requirements and impact of limited blockings in the stabilization of decentralized markets.

The second research line will consist of a number of empirical studies on various aspects of individual preferences and behavior focusing mainly on the use of subjective well-being measures as a proxy for utility. The research can be summarized in four main topics: (i) the role of uncertainty and risk attitudes on well-being by examining how individual characteristics other than risk attitudes shape inequality aversion; (ii) empirically examining the validity of anchoring vignettes as a method to operationalizing the concept of ex ante utility; (iii) work on the formalization of an econometric method to estimate life satisfaction; and (iv) continue the work on the importance of uncertainty and risk attitudes for individuals behavior and outcomes in the labor market.

Immigrant Location and Native Residential Preferences in Spain: New Ghettoes?
ACUP , RecerCaixa 2011
2012-2014
Ada Ferrer-i-Carbonell, Jess Fernndez-Huertas Moraga, Albert Saiz

In recent years, Spain in general and Catalonia in particular have seen an enormous and unprecedented increase in the international migration inflows. This project wants to understand the impact of immigration on neighborhood dynamics in Spain. We will study whether immigrants and/or natives display preferences for residential segregation on an ethnic basis or if location decisions depend mostly or only on geographical amenities. Answering these questions would allow us to understand the future of ethnic segregation at the residential level in Spain and to evaluate whether there are policies that could help mute the segregation process. The residential level of segregation, geographical location of individuals, and the formation of ghettoes are very important determinants of future welfare.

Location is an important factor for social integration and public participation of migrants. If immigrants live close to natives, they have a larger probability to meet them and integrate into their social networks. This is especially important for their children (the second generation).

"Advances in the Political Economy of Democratic Institutions"
ECO2012-37857, Ministerio Economa y Competitividad
2013-2015
Enriqueta Aragons, Josep Maria Colomer Calsina, Hannes Felix Mueller, Timothy John Besley, Micael R. Castanheira de Moura, Marco Giani, Dominic Patrick Rohner, Dimitrios Xefteris

This project brings together researchers in Economics and Political Science. Its aim is to explore the role and social consequences of different political institutions by developing scientific methods that lie on the frontier between Economics and Political Science. Its ultimate goal is to contribute to the innovative design of social and political institutions.
The new developments that we propose in our work plan will proceed along three main research lines:

1. Proposing models of electoral competition that analyze the effects and the effectivity of electoral campaigns from both the voters and the political parties point of view.
2. Addressing the design of democratic institutions that could improve the performace of representative democracy.
3. Analyzing the political dimension of conflict: the role of social and political institutions in determining the extend and consequences of social conflict.

"Schools, Culture, Markets and Democratic Institutions in a Globalized World"
ECO2012-37065, Ministerio Economa y Competitividad
2013-2015
Esther Hauk , Sjaak Hurkens, Clara Ponsat Obiols, Facundo Albornoz Crespo, Giovanni Immordino, Doh-Shin Jeon, Javier Ortega Diego, Arnau Valladares Esteban

The number of immigrants are growing, cultures mix, are schooled together and need to find ways to resolve their conflicts. As markets grow, network effects gain importance. The aim of this project is to address some of these challenges that globalization entails. We will concentrate on the following main issues. (i) We will look at the historical issue of Nations and Nationbuilding and propose a theoretical model that links nation building and industrialization. (ii) We will study family immigration, in particular, the effect of immigration on the school system and try to understand how to attract immigrants with high parental motivation. (iii) We will try to understand whether TV program imports constitute a threat for cultural diversity, (iv) we will examine lying aversion and whether the same behavioral theory can explain behavior in TV game shows in different countries, (v) we will study competition and regulation in markets with network effects. Finally, we are interested in understanding how groups should negotiate and which institutions will form under democracy: in particular, we want to understand which sharing rules and stable organizations evolve under democratic decision making, how different majority rule affect the conflict resolution among two groups and if groups will choose a delegate to represent them in negotiations or prefer to submit the agreements reached by their representative to a ratification vote.

"The Dynamics of Firm Behavior at the Intersection of Labor Markets, Financial Markets, Foreign Product Markets, and Government Regulations"
ECO2012-38460, Ministerio Economa y Competitividad
2013-2015
Ana Rute Cardoso, Hugo Rodriguez Mendizabal, Radim Bohacek, David Card, Paulo Guimaraes, Patrick Kline, Nria Rodrguez-Planas, Keke Sun, Jose Varejao

Misallocation of workers and capital across firms has been shown to generate substantial loss of income and wellbeing. This problem is particularly obvious when we talk about high unemployment rates in a crisis setting, jobless economic recoveries, or a profusion of low quality jobs. At the heart of these problems lies the behavior of firms, which are constrained by financial markets, product markets, labor markets, and government regulations.
This project brings to the forefront of the analysis the firm and its decisions on the allocation of resources, addressing three issues on the dynamics of firm behavior: i) What are the sources of firm quality (access to high quality and flexible labor force? Access to export product markets? Access to financial markets?); ii) How do firms of different quality compare, in terms of their growth rates and the development of careers they offer their workers?; iii) How stable is the ranking of firms over time according to their quality?
We aim at analyzing the interaction between institutions and regulations, on one hand, and supply and demand market forces, on the other, as determinants of firm behavior. We are particularly interested in the labor market, foreign product markets, financial markets, and regulations such as: incentives for labor market participation, rules on labor flexibility and adequate pay, regulations aimed at reducing financial market frictions and promoting insurance markets, and recent innovations in central banking policies.

"The Macroeconomic Implications of Heterogenous Firms"
2014 SGR 1432, Generalitat de Catalunya
2014-2017
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 terica i aplicada"
2014 SGR 1446, Generalitat de Catalunya
2014-2017
Albert Marcet, Angel de la Fuente, Hugo Rodrguez, Sarolta Lacz, Albert Snchez

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 terica i aplicada"
2014 SGR 510, Generalitat de Catalunya
2014-2017
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
2014-2017
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 Poltica"
2014 SGR 1064, Generalitat de Catalunya
2014-2017
Enriqueta Aragons, Josep M. Colomer, Hannes Mueller, Esther Hauk, Flip Klijn, Clara Ponsat, 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.