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ECO2016-76818-C3-2-P. Research on Human Capital and Inequality, and on Technology and the Environment-2 (i-HINNOV-2)

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The THUIT-2 project is a continuation of several Excellence R&D&I projects from the 2013 and 2014 calls for proposals. Our aim is to continue contributing to the understanding of technological innovation and capital accumulation processes in the global economy. Investment decisions in physical and human capital by households, businesses, and the public sector, the management of energy resources, and the consequences of all these actions in terms of inequality or sustainable growth are closely linked to our level of technology. Furthermore, this interaction takes place within a global market economy, with international mobility of factors of production. All these processes analyzed in the project are of particular interest to the Excellence Call for Proposals of the National R&D Plan and are an essential part of some of the Challenges of the Spanish Research Strategy 2013-16 (Challenge 6 and part of Challenge 5). To advance our understanding of these processes, we will construct economic models that incorporate them as essential features and then proceed to their empirical testing. We propose to work with models of:

  1. sustainable growth,
  2. inequality, poverty and growth,
  3. technology adoption and capital generation,
  4. use of energy and non-renewable resources, and generation of emissions,
  5. international trade and finance, vi) fiscal policy, debt and sustainable growth,
  6. search, competition, and negotiation models.

The results will allow us to propose macroeconomic policy recommendations, with applications not only for the global economy, but also for Spain and the European Union. To empirically test the hypotheses, we will use several databases. Some of these include information on macroeconomic variables in the area of energy and the environment, for example, while others are microeconomic in nature, with panel data on household wealth, poverty levels, technological progress, and the productive capacity of firms. Our general framework is Dynamic General Equilibrium. The researchers at THUIT-2 have made significant contributions to this framework in the specific areas of our project. Our progress will improve our understanding of issues such as:

  1. How does technological progress affect incentives to accumulate human capital and fiscal policy?
  2. How does the adoption of technology in the global economy increase productivity?
  3. What is the relationship between inequality, poverty, growth, and technological progress?
  4. What impact will the environment have on productivity, human capital, and growth in different countries?
  5. What is the relationship between technological progress, energy efficiency, rebound effect, and emissions generation?
  6. How can public policies increase energy efficiency and improve our quality of life?
  7.  How can the efficiency of decentralized markets be improved?

Our proposal is organized into three teams, each comprised of three public institutions with international research networks. Our findings will help us recommend policies that promote improvements in market efficiency, technological progress, human capital development, sustainable growth, efficient energy use, environmental conservation, openness to trade, and the reduction of inequality.

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The project THUIT-2 is the continuation of several projects of R+D+i of Excellence from the last calls of 2013 and 2014. Our aim is to keep contributing in our understanding of the processes of technical innovation and capital accomposition in the global economy. Technology interacts with the investment decisions made by households, firms and governments over the accumulation of physical and human capital, and the management of natural resources and the labor force. This interaction occurs in a global market economy open to international flows of production factors. All these processes are considered to be of special interest in the Excellence Call of the National R&D Plan, and an essential part of the Challenges of the Spanish Research Strategy 2013-16 (Challenges 6 and 5).

In order to advance in our understanding of the aforementioned processes we aim to build theoretical model economies that incorporate their key features and we will test them with econometric tools. We aim to build model economies of

  1. sustainable growth,
  2. inequality, poverty and growth,
  3. adoption of technologies and vintage capital
  4. energy use and non-renewable resources,
  5. international trade and finance
  6. fiscal policy, debt and sustainable growth,
  7. decentralized trading.

The results obtained will help us to propose policy recommendations, for the governance of the global economy as well as Spain and the European Union. In order to test our model hypothesis we will use various data bases, some of which we have already worked with. Some of them refer to aggregate data on energy use and the environment and others are panel data on households and firms characteristics. Our general framework is the Dynamic General Equilibrium framework. The members of THUIT-2 already have significant contributions within this framework in areas related to our project. Our progress in this project will improve our knowledge in issues such as

  1. What is the effect of technical progress on the incentives to accumulate human capital and fiscal policy?
  2. How does technology adoption relate to aggregate productivity?
  3. What are the links of inequality, poverty, growth and technical progress?
  4. What is the predicted impact of climate change on productivity, human capital and growth in different countries? v) What are the links between technical progress, energy efficiency, rebound effect and emissions?
  5. How can public policies encourage energy efficiency and improve our living standards?
  6. How we can improve efficiency in decentralized trading?

Our proposal is organized in three teams located in three public institutions connected to international research centers. Our results will allow us to propose public policies that promote market efficiency, technical progress, accumulation of human capital, sustainable growth, energy efficiency, opening up to trade and reductions in inequality.

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Researcher at the University of La Laguna

Project Coordinator

  • Antonio Díaz Rodríguez (Carlos III University)
  • Information
  • Category: National
  • Program: Excellence
  • ANEP Area: Economics Area (ECO)
  • Start date: 30/12/2016
  • End date: 29/12/2019