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Description
Events such as an increased concentration on domestic matters and engagement in trade wars by the US, the British decision to leave the European Union and an increase in global political and economic power by China, as well as current pandemic and global lockdowns, call for a deeper understanding of how societies adjust their behavior within such an uncertain and evolving environment.
We plan to tackle these broad socio-economic challenges by analyzing in detail, firstly, how firms adjust to trade shocks in terms of their labor allocations, human capital and technological investments; secondly, concentrating on how the two major adjustments of firms’ production functions – labor and technology – interact in response to increasing global uncertainty, especially in the face of deglobalization and the fragmentation of global trade links; finally, combining the empirical insights from the first and the second blocks, and building a theoretical framework on the labour market adjustments, paying special attention to the complementarity/substitutability of new types of labor and capital as well as labor and technology (automation). The three blocks will take three different approaches – empirical analysis based on administrative data, empirical analysis based on the new big data methods, theoretical and structural analysis – and dovetail in our plan to understand the firm- and individual-level adjustments.
The expected project results include not less than 12 theoretical and empirical publications in high level academic journals, a number of working papers and policy notes to foster economic policy debate among economic agents and equip the policy makers with relevant economic policy tools, the creation of new databases available to economic researchers in the future, the organization of one large international conference and an enhanced research network that would serve as a platform for future collaborations (we plan at least one follow-up research grant).
Summary of project results
Events such as an increased concentration on domestic matters and engagement in trade wars by the US, the British decision to leave the European Union and an increase in global political and economic power by China, as well as pandemic lockdowns, war in Ukraine, sanctions and reconfiguration of globall business links, call for a deeper understanding of how societies adjust their behavior within such an uncertain and evolving environment.
We tackled these broad socio-economic challenges by analyzing in detail, firstly, how firms adjust to various shocks in terms of their labor allocations, human capital and technological investments; secondly, concentrating on how the two major adjustments of firms’ production functions – labor and technology – interact in response to increasing global uncertainty, especially in the face of (but not limited to) deglobalization and the fragmentation of global trade links; finally, combining the empirical insights from the first and the second blocks, and building a theoretical framework on the labour market adjustments, paying special attention to the complementarity/substitutability of new types of labor and capital as well as labor and technology (automation). We also looked into households adjustments and government policies. The three blocks took three different approaches – empirical analysis based on administrative data, empirical analysis based on the new big data methods, theoretical and structural analysis – and dovetail in our plan to understand the firm- and individual-level adjustments.
We tackled these broad socio-economic challenges by analyzing in detail, firstly, how firms adjust to various shocks in terms of their labor allocations, human capital and technological investments; secondly, concentrating on how the two major adjustments of firms’ production functions – labor and technology – interact in response to increasing global uncertainty, especially in the face of (but not limited to) deglobalization and the fragmentation of global trade links; finally, combining the empirical insights from the first and the second blocks, and building a theoretical framework on the labour market adjustments, paying special attention to the complementarity/substitutability of new types of labor and capital as well as labor and technology (automation). We also looked into households adjustments and government policies. The three blocks took three different approaches – empirical analysis based on administrative data, empirical analysis based on the new big data methods, theoretical and structural analysis – and dovetail in our plan to understand the firm- and individual-level adjustments.
The project results include not less than 12 (planned number of publications) theoretical and empirical publications in high level academic journals, a number of working papers and policy notes to foster economic policy debate among economic agents and equip the policy makers with relevant economic policy tools, the creation of new databases available to economic researchers in the future, the organization of one large international conference and an enhanced research network that would serve as a platform for future collaborations (we plan at least one follow-up research grant).
The beneficiaries of the project are primarily policymakers of small open economies such as Baltic States, Norway, Iceland, and Lichtenstein, and their constituents: firms and residents. The understanding what kind of adjustments are implemented in response to growing uncertainty can guide economic policy makers in deciding what alterations to policy making should be done to maximize society’s welfare.
Summary of bilateral results
The project brought together a group of experienced and productive researchers from Baltic countries and Norway,Researchers participated in various meetings, conferences, seminars, and workshops, which provided platforms for networking, project promotion, and academic debate. All these meetings, conferences, workshops, sessions, and joint research collaborations allowed us cement a broader research network and culminated in three research grant applications that include BI NO member and some or all Baltic investigators.