Project acronym COMPOSES
Project Compositional Operations in Semantic Space
Researcher (PI) Marco Baroni
Host Institution (HI) UNIVERSITA DEGLI STUDI DI TRENTO
Call Details Starting Grant (StG), SH4, ERC-2011-StG_20101124
Summary The ability to construct new meanings by combining words into larger constituents is one of the fundamental and peculiarly human characteristics of language. Systems that induce the meaning and combinatorial properties of linguistic symbols from data are highly desirable both from a theoretical perspective (modeling a core aspect of cognition) and for practical purposes (supporting human-computer interaction). COMPOSES tackles the meaning induction and composition problem from a new perspective that brings together corpus-based distributional semantics (that is very successful at inducing the meaning of single content words, but ignores functional elements and compositionality) and formal semantics (that focuses on functional elements and composition, but largely ignores lexical aspects of meaning and lacks methods to learn the proposed structures from data). As in distributional semantics, we represent some content words (such as nouns) by vectors recording their corpus contexts. Implementing instead ideas from formal semantics, functional elements (such as determiners) are represented by functions mapping from expressions of one type onto composite expressions of the same or other types. These composition functions are induced from corpus data by statistical learning of mappings from observed context vectors of input arguments to observed context vectors of composite structures. We model a number of compositional processes in this way, developing a coherent fragment of the semantics of English in a data-driven, large-scale fashion. Given the novelty of the approach, we also propose new evaluation frameworks: On the one hand, we take inspiration from cognitive science and experimental linguistics to design elicitation methods measuring the perceived similarity and plausibility of sentences. On the other, specialized entailment tests will assess the semantic inference properties of our corpus-induced system.
Summary
The ability to construct new meanings by combining words into larger constituents is one of the fundamental and peculiarly human characteristics of language. Systems that induce the meaning and combinatorial properties of linguistic symbols from data are highly desirable both from a theoretical perspective (modeling a core aspect of cognition) and for practical purposes (supporting human-computer interaction). COMPOSES tackles the meaning induction and composition problem from a new perspective that brings together corpus-based distributional semantics (that is very successful at inducing the meaning of single content words, but ignores functional elements and compositionality) and formal semantics (that focuses on functional elements and composition, but largely ignores lexical aspects of meaning and lacks methods to learn the proposed structures from data). As in distributional semantics, we represent some content words (such as nouns) by vectors recording their corpus contexts. Implementing instead ideas from formal semantics, functional elements (such as determiners) are represented by functions mapping from expressions of one type onto composite expressions of the same or other types. These composition functions are induced from corpus data by statistical learning of mappings from observed context vectors of input arguments to observed context vectors of composite structures. We model a number of compositional processes in this way, developing a coherent fragment of the semantics of English in a data-driven, large-scale fashion. Given the novelty of the approach, we also propose new evaluation frameworks: On the one hand, we take inspiration from cognitive science and experimental linguistics to design elicitation methods measuring the perceived similarity and plausibility of sentences. On the other, specialized entailment tests will assess the semantic inference properties of our corpus-induced system.
Max ERC Funding
1 117 636 €
Duration
Start date: 2011-11-01, End date: 2016-10-31
Project acronym DECIDE
Project The impact of DEmographic Changes on Infectious DisEases transmission and control in middle/low income countries
Researcher (PI) Alessia Melegaro
Host Institution (HI) UNIVERSITA COMMERCIALE LUIGI BOCCONI
Call Details Starting Grant (StG), SH3, ERC-2011-StG_20101124
Summary Population structure and change and social contact patterns are major determinants of the observed epidemiology of infectious diseases, including the consequences on health. Demographic structure and the components of demographic dynamics are changing over time and substantially differ within countries and most critically between countries. However, some of the overall consequences of demographic changes remain unclear, though urbanisation and fertility decline will certainly have a profound impact on social structures, family composition and, as a consequence, on disease spread and on the identification of effective public health measures.
DECIDE will explore the following questions:
1. What are the major short- and medium-term impacts of demographic changes on the patterns of infectious disease (morbidity and mortality)?
2. How are these demographic changes affecting contact patterns that are of fundamental importance to the spread of infectious diseases? Are there new and different modes of transmission within and between populations?
3. What are the implications of demographic changes for infection control strategies? What is the interplay between demographic changes and public health policies in shaping future trajectories of infectious diseases?
In order to answer these questions, DECIDE will use the following strategy: analyse harmonised demographic and health survey data (DHS), and health and demographic surveillance system data (HDSS); develop new estimates of social contact patterns and other socio-demographic variables collecting data from representative samples of both urban and rural settings in selected countries; develop a theoretical framework to predict the likely chains through which demographic change influences the burden of infectious diseases; develop and parameterise mathematical population models for the transmission of infectious diseases to evaluate the impact of public health measures under changing demographic conditions.
Summary
Population structure and change and social contact patterns are major determinants of the observed epidemiology of infectious diseases, including the consequences on health. Demographic structure and the components of demographic dynamics are changing over time and substantially differ within countries and most critically between countries. However, some of the overall consequences of demographic changes remain unclear, though urbanisation and fertility decline will certainly have a profound impact on social structures, family composition and, as a consequence, on disease spread and on the identification of effective public health measures.
DECIDE will explore the following questions:
1. What are the major short- and medium-term impacts of demographic changes on the patterns of infectious disease (morbidity and mortality)?
2. How are these demographic changes affecting contact patterns that are of fundamental importance to the spread of infectious diseases? Are there new and different modes of transmission within and between populations?
3. What are the implications of demographic changes for infection control strategies? What is the interplay between demographic changes and public health policies in shaping future trajectories of infectious diseases?
In order to answer these questions, DECIDE will use the following strategy: analyse harmonised demographic and health survey data (DHS), and health and demographic surveillance system data (HDSS); develop new estimates of social contact patterns and other socio-demographic variables collecting data from representative samples of both urban and rural settings in selected countries; develop a theoretical framework to predict the likely chains through which demographic change influences the burden of infectious diseases; develop and parameterise mathematical population models for the transmission of infectious diseases to evaluate the impact of public health measures under changing demographic conditions.
Max ERC Funding
1 210 000 €
Duration
Start date: 2012-04-01, End date: 2017-12-31
Project acronym DROEMU
Project DROPLETS AND EMULSIONS: DYNAMICS AND RHEOLOGY
Researcher (PI) Mauro Sbragaglia
Host Institution (HI) UNIVERSITA DEGLI STUDI DI ROMA TOR VERGATA
Call Details Starting Grant (StG), PE3, ERC-2011-StG_20101014
Summary The applications of micro- and nanofluidics are now numerous, including lab-on-chip systems based upon micro-manipulation of discrete droplets, emulsions of interest in food and medical industries (drug delivery), analytical separation techniques of biomolecules, such as proteins and DNA, and facile handling of mass-limited samples. The problems involved contain diverse nano- and microstructures with a variety of lifetimes, touching atomistic scales (contact lines, thin films), mesoscopic collective behaviour (emulsions, glassy, soft-jammed systems) and hydrodynamical spatio-temporal evolutions (droplets and interface dynamics) with complex rheology and strong non-equilibrium properties. The interplay of the dynamics at the different scales involved still remains to be fully understood.
The fundamental research I address in this project aims to set up the unified framework for the characterization and modelling of interfaces in confined geometries by means of an innovative micro- and nanofluidic numerical platform.
The main challenging and ambitious questions I intend to address in my project are: How the stability of micro- and nanodroplets is affected by thermal gradients? Or by boundary corrugation and modulated wettability? Or by complex rheological properties of the dispersed and/or continuous phases? How these effects can be tuned to design new optimal devices for emulsions production? What are the rheological properties of these new soft materials? How confinement in small structures changes the bulk emulsion properties? What is the molecular-hydrodynamical mechanism at the origin of contact line slippage? How to realistically model the fluid-particle interactions on the molecular scale?
The strength of the project lies in an innovative and state-of-the-art numerical approach, based on mesoscopic Lattice Boltzmann Models, coupled to microscopic molecular physics, supported by theoretical modelling, lubrication theory and experimental validation.
Summary
The applications of micro- and nanofluidics are now numerous, including lab-on-chip systems based upon micro-manipulation of discrete droplets, emulsions of interest in food and medical industries (drug delivery), analytical separation techniques of biomolecules, such as proteins and DNA, and facile handling of mass-limited samples. The problems involved contain diverse nano- and microstructures with a variety of lifetimes, touching atomistic scales (contact lines, thin films), mesoscopic collective behaviour (emulsions, glassy, soft-jammed systems) and hydrodynamical spatio-temporal evolutions (droplets and interface dynamics) with complex rheology and strong non-equilibrium properties. The interplay of the dynamics at the different scales involved still remains to be fully understood.
The fundamental research I address in this project aims to set up the unified framework for the characterization and modelling of interfaces in confined geometries by means of an innovative micro- and nanofluidic numerical platform.
The main challenging and ambitious questions I intend to address in my project are: How the stability of micro- and nanodroplets is affected by thermal gradients? Or by boundary corrugation and modulated wettability? Or by complex rheological properties of the dispersed and/or continuous phases? How these effects can be tuned to design new optimal devices for emulsions production? What are the rheological properties of these new soft materials? How confinement in small structures changes the bulk emulsion properties? What is the molecular-hydrodynamical mechanism at the origin of contact line slippage? How to realistically model the fluid-particle interactions on the molecular scale?
The strength of the project lies in an innovative and state-of-the-art numerical approach, based on mesoscopic Lattice Boltzmann Models, coupled to microscopic molecular physics, supported by theoretical modelling, lubrication theory and experimental validation.
Max ERC Funding
1 170 924 €
Duration
Start date: 2011-12-01, End date: 2016-11-30
Project acronym EINITE
Project "Economic Inequality across Italy and Europe, 1300-1800"
Researcher (PI) Guido Alfani
Host Institution (HI) UNIVERSITA COMMERCIALE LUIGI BOCCONI
Call Details Starting Grant (StG), SH6, ERC-2011-StG_20101124
Summary "The aim of EINITE is to clarify the dynamics of economic inequality in Europe from the late Middle Ages up until the beginning of the Industrial Revolution. Very little data about economic inequality during such an early period is available today. Apart from some studies focussed on single years and small areas (usually only one city or a village), the only European region which has been the object of a large research project is Holland.
The project will collect an extensive database about economic inequality, mainly of wealth (for which better documentation exists), focussing on Italy from a wider European perspective. Archival research will be concentrated on Italy where particularly good sources exist, but the Italian case will be placed in the varying European context. Published data and existing databases from all over the continent will be collected as terms of comparison. The final version of the project database will be made public.
The activity of ENITE will be organized around four main research questions:
1) What is the long-term relationship between economic growth and inequality?
This is the main question to which the others are all connected.
2) What were the effects of plagues and other severe mortality crises on property structures?
3) What is the underlying relationship between immigration and urban inequality?
4) How was economic inequality perceived in the past, and how did its perception change over time?
The project will also help to explain the origin of the property structures and inequality levels to be found on the eve of the Industrial Revolution. Then, it will provide information relevant to the ‘Kuznets curve’ debate. Overall the project will lead to a better knowledge of economic inequality in the past, which is also expected to help understanding recent developments in inequality levels in Europe and elsewhere."
Summary
"The aim of EINITE is to clarify the dynamics of economic inequality in Europe from the late Middle Ages up until the beginning of the Industrial Revolution. Very little data about economic inequality during such an early period is available today. Apart from some studies focussed on single years and small areas (usually only one city or a village), the only European region which has been the object of a large research project is Holland.
The project will collect an extensive database about economic inequality, mainly of wealth (for which better documentation exists), focussing on Italy from a wider European perspective. Archival research will be concentrated on Italy where particularly good sources exist, but the Italian case will be placed in the varying European context. Published data and existing databases from all over the continent will be collected as terms of comparison. The final version of the project database will be made public.
The activity of ENITE will be organized around four main research questions:
1) What is the long-term relationship between economic growth and inequality?
This is the main question to which the others are all connected.
2) What were the effects of plagues and other severe mortality crises on property structures?
3) What is the underlying relationship between immigration and urban inequality?
4) How was economic inequality perceived in the past, and how did its perception change over time?
The project will also help to explain the origin of the property structures and inequality levels to be found on the eve of the Industrial Revolution. Then, it will provide information relevant to the ‘Kuznets curve’ debate. Overall the project will lead to a better knowledge of economic inequality in the past, which is also expected to help understanding recent developments in inequality levels in Europe and elsewhere."
Max ERC Funding
995 400 €
Duration
Start date: 2012-01-01, End date: 2016-12-31
Project acronym FINIMPMACRO
Project Financial Imperfections and Macroeconomic Implications
Researcher (PI) Tommaso Monacelli
Host Institution (HI) UNIVERSITA COMMERCIALE LUIGI BOCCONI
Call Details Starting Grant (StG), SH1, ERC-2011-StG_20101124
Summary We plan to study the implications of financial market imperfections for four main questions.
First, how do financial imperfections affect the optimal conduct of monetary and exchange rate policy in open economies? A key insight is that we characterize financial frictions as endogenous and only occasionally binding. This can have important implications for the optimal conduct of stabilization policy.
Second, how do financial and labor market imperfections interact? We extend the standard search-and-matching model to allow firms to issue debt. This feature affects the wage bargaining process endogenously, since firms, by leveraging, can pay lower wages. We study the ability of such a model to replicate the volatility and persistence of unemployment in the data, and the role of financial imperfections in affecting the transmission of productivity and financial shocks.
Third, does the effectiveness of tax policy depend on its redistributive content, and how is this affected by financial imperfections? We characterize the distributional feature of several Tax Acts in the US, and investigate empirically whether tax changes that “favor the poor” are more expansionary than cuts that “favor the rich”. We then build a theoretical framework with heterogeneous agents and financial frictions to rationalize our evidence.
Fourth, how do financial intermediaries affect the transmission channel of monetary policy? We extend the current New Keynesian framework for monetary policy analysis to study the role of financial intermediaries. We emphasize the role of three features: (i) asymmetric information in interbank markets; (ii) maturity mismatch in the banks’ balance sheets; (iii) the “paradox of securitization”, thereby a deeper diversification of idiosyncratic risk leads to a simultaneous increase in the sensitivity of banks’ balance sheets to aggregate risk.
Summary
We plan to study the implications of financial market imperfections for four main questions.
First, how do financial imperfections affect the optimal conduct of monetary and exchange rate policy in open economies? A key insight is that we characterize financial frictions as endogenous and only occasionally binding. This can have important implications for the optimal conduct of stabilization policy.
Second, how do financial and labor market imperfections interact? We extend the standard search-and-matching model to allow firms to issue debt. This feature affects the wage bargaining process endogenously, since firms, by leveraging, can pay lower wages. We study the ability of such a model to replicate the volatility and persistence of unemployment in the data, and the role of financial imperfections in affecting the transmission of productivity and financial shocks.
Third, does the effectiveness of tax policy depend on its redistributive content, and how is this affected by financial imperfections? We characterize the distributional feature of several Tax Acts in the US, and investigate empirically whether tax changes that “favor the poor” are more expansionary than cuts that “favor the rich”. We then build a theoretical framework with heterogeneous agents and financial frictions to rationalize our evidence.
Fourth, how do financial intermediaries affect the transmission channel of monetary policy? We extend the current New Keynesian framework for monetary policy analysis to study the role of financial intermediaries. We emphasize the role of three features: (i) asymmetric information in interbank markets; (ii) maturity mismatch in the banks’ balance sheets; (iii) the “paradox of securitization”, thereby a deeper diversification of idiosyncratic risk leads to a simultaneous increase in the sensitivity of banks’ balance sheets to aggregate risk.
Max ERC Funding
778 800 €
Duration
Start date: 2012-01-01, End date: 2016-12-31
Project acronym LABORHETEROGENEITY
Project Labor Heterogeneity in Search Markets
Researcher (PI) Philipp Kircher
Host Institution (HI) EUROPEAN UNIVERSITY INSTITUTE
Call Details Starting Grant (StG), SH1, ERC-2011-StG_20101124
Summary The work laid out in this proposal aims to change our understanding of labor markets by viewing both the mobility as well as the frictions in the market as a consequence of long-term worker heterogeneity. Despite the advances in information technology which substantially reduce the costs of sending information (job advertisements, job applications) extracting the relevant information about worker quality remains hard. Long-term differences in ability coupled with screening frictions are proposed as the main reason for mismatch, for mobility, and for the presence of unemployment.
The proposal is based on novel empirical observations on occupational mobility. Both low-paid workers as well as high-paid workers in an occupation tend to leave it. The former tend to move to occupations with lower average pay, while the opposite holds for the latter. This happens even within firms, and after excluding managerial positions.
Most work on selection assumes that low-earners leave. This data suggest a novel angle: Workers have a long-term type that affects productivity in their current and in new occupations. They might accumulate human capital, but also their baseline ability is imperfectly known. Unexpectedly low performers (low-wage workers) have to leave towards less demanding tasks, while high performers change to more demanding tasks. This consistently accounts for the observed selection patterns.
When workers know more about their ability than new firms, this also explains unemployment: firms spend efforts on screening, and impose costs on workers to induce them to self-select. The latter counteracts exogenous reductions in workers’ search costs. The aim is to develop a tractable model of screening unemployment that can serve as a building block in larger macro-labor models, and to assess the work of the government employment agency through the lens of a mechanism designer that facilitates match-making but relies on firms for additional screening of the unemployed.
Summary
The work laid out in this proposal aims to change our understanding of labor markets by viewing both the mobility as well as the frictions in the market as a consequence of long-term worker heterogeneity. Despite the advances in information technology which substantially reduce the costs of sending information (job advertisements, job applications) extracting the relevant information about worker quality remains hard. Long-term differences in ability coupled with screening frictions are proposed as the main reason for mismatch, for mobility, and for the presence of unemployment.
The proposal is based on novel empirical observations on occupational mobility. Both low-paid workers as well as high-paid workers in an occupation tend to leave it. The former tend to move to occupations with lower average pay, while the opposite holds for the latter. This happens even within firms, and after excluding managerial positions.
Most work on selection assumes that low-earners leave. This data suggest a novel angle: Workers have a long-term type that affects productivity in their current and in new occupations. They might accumulate human capital, but also their baseline ability is imperfectly known. Unexpectedly low performers (low-wage workers) have to leave towards less demanding tasks, while high performers change to more demanding tasks. This consistently accounts for the observed selection patterns.
When workers know more about their ability than new firms, this also explains unemployment: firms spend efforts on screening, and impose costs on workers to induce them to self-select. The latter counteracts exogenous reductions in workers’ search costs. The aim is to develop a tractable model of screening unemployment that can serve as a building block in larger macro-labor models, and to assess the work of the government employment agency through the lens of a mechanism designer that facilitates match-making but relies on firms for additional screening of the unemployed.
Max ERC Funding
1 170 000 €
Duration
Start date: 2012-09-01, End date: 2017-08-31
Project acronym MyoPHAGY
Project DEFINING THE MECHANISMS OF AGE-RELATED MUSCLE LOSS: FOCUS ON AUTOPHAGY
Researcher (PI) Marco Sandri
Host Institution (HI) FONDAZIONE PER LA RICERCA BIOMEDICA AVANZATA ONLUS
Call Details Starting Grant (StG), LS4, ERC-2011-StG_20101109
Summary Muscle loss occurs in many diseases including cancer, AIDS, diabetes, renal or cardiac failure and sepsis. The wasting of muscle mass is characterized by the activation of an atrophy program that coordinates the ubiquitin-proteasome and autophagy-lysosome systems. The simultaneous activation of these systems allows the breakdown of contractile proteins and the removal of organelles. Ageing sarcopenia and frailty are also characterised by progressive muscle loss. However, the mechanisms that are at the base of this weakness are obscure. Sarcopenia results in a progressive loss of mobility that decreases the quality of life and has major economic and social consequences. In fact the age-dependent muscle atrophy favour traumatic events, accident, fracture or illness which lead to aged person to become hospitalised and bed-ridden or housebound, thus -having a high mortality in the year following their accident. The signalling pathways, which regulate loss of proteins and organelles in muscle fibers, are just at the beginning to be understood. We have recently found that autophagy-lysosome system is critical to maintain muscle mass and that its alteration leads to muscle atrophy, weakness and to several features that are present in ageing sarcopenia. Thus, dissecting the regulation of autophagy system in skeletal muscle and its role in muscle homeostasis is crucial for developing new therapeutic tools to counteract sarcopenia. This project is an effort in this direction. We aim: i) to identify molecular mechanisms and pathways which are responsible for autophagy regulation in skeletal muscle and which may be targeted to combat age related muscle weakness, (ii) to dissect the cross-talk between muscle and nerve, (iii) to determine the cross-talk between autophagy-lysosome and ubiquitin-proteasome, iv) to translate the findings obtained in animal models to human skeletal muscles.
Summary
Muscle loss occurs in many diseases including cancer, AIDS, diabetes, renal or cardiac failure and sepsis. The wasting of muscle mass is characterized by the activation of an atrophy program that coordinates the ubiquitin-proteasome and autophagy-lysosome systems. The simultaneous activation of these systems allows the breakdown of contractile proteins and the removal of organelles. Ageing sarcopenia and frailty are also characterised by progressive muscle loss. However, the mechanisms that are at the base of this weakness are obscure. Sarcopenia results in a progressive loss of mobility that decreases the quality of life and has major economic and social consequences. In fact the age-dependent muscle atrophy favour traumatic events, accident, fracture or illness which lead to aged person to become hospitalised and bed-ridden or housebound, thus -having a high mortality in the year following their accident. The signalling pathways, which regulate loss of proteins and organelles in muscle fibers, are just at the beginning to be understood. We have recently found that autophagy-lysosome system is critical to maintain muscle mass and that its alteration leads to muscle atrophy, weakness and to several features that are present in ageing sarcopenia. Thus, dissecting the regulation of autophagy system in skeletal muscle and its role in muscle homeostasis is crucial for developing new therapeutic tools to counteract sarcopenia. This project is an effort in this direction. We aim: i) to identify molecular mechanisms and pathways which are responsible for autophagy regulation in skeletal muscle and which may be targeted to combat age related muscle weakness, (ii) to dissect the cross-talk between muscle and nerve, (iii) to determine the cross-talk between autophagy-lysosome and ubiquitin-proteasome, iv) to translate the findings obtained in animal models to human skeletal muscles.
Max ERC Funding
1 250 000 €
Duration
Start date: 2011-11-01, End date: 2016-10-31
Project acronym NETWORKS
Project Networks, Markets and Organizations
Researcher (PI) Andrea Galeotti
Host Institution (HI) EUROPEAN UNIVERSITY INSTITUTE
Call Details Starting Grant (StG), SH1, ERC-2011-StG_20101124
Summary The complex set of relationships among economic agents has profound effects on individuals’ behaviour and economic outcomes. This premise, which finds strong empirical support, is at the basis of the recent development of the economic theory of networks. Research on networks in the last 15 years has set up a common tool to model and study complex relationships within the economic paradigm. This project will advance the state of the art by 1) furthering the development of network theory in economics, and 2) developing new applied models of networks in economics.
The project is organised into three, inter-related sub-projects. In sub-project 1, networks will be used to represent different markets architectures. The objectives are to explain how trading mechanisms and the architecture of the network jointly shape the properties of the market equilibrium, and to provide normative insights on how to organize and regulate markets where trading networks are in place. In sub-project 2, networks will be used to model organizations. The objectives are to improve our understanding of the optimal design of an organization, and to provide a rationale for the current empirical organizational trends from hierarchical to more decentralised organizations. In sub-project 3, networks will be used to model communication. The objectives are to improve our understanding of information aggregation in multi-player environments, and to apply these insights to understand the effect of strategic communication on political games.
Summary
The complex set of relationships among economic agents has profound effects on individuals’ behaviour and economic outcomes. This premise, which finds strong empirical support, is at the basis of the recent development of the economic theory of networks. Research on networks in the last 15 years has set up a common tool to model and study complex relationships within the economic paradigm. This project will advance the state of the art by 1) furthering the development of network theory in economics, and 2) developing new applied models of networks in economics.
The project is organised into three, inter-related sub-projects. In sub-project 1, networks will be used to represent different markets architectures. The objectives are to explain how trading mechanisms and the architecture of the network jointly shape the properties of the market equilibrium, and to provide normative insights on how to organize and regulate markets where trading networks are in place. In sub-project 2, networks will be used to model organizations. The objectives are to improve our understanding of the optimal design of an organization, and to provide a rationale for the current empirical organizational trends from hierarchical to more decentralised organizations. In sub-project 3, networks will be used to model communication. The objectives are to improve our understanding of information aggregation in multi-player environments, and to apply these insights to understand the effect of strategic communication on political games.
Max ERC Funding
944 260 €
Duration
Start date: 2011-10-01, End date: 2016-09-30
Project acronym NSND
Project New Strategies and New Data to Test Intertemporal Consumer and Firm Behavior
Researcher (PI) Luigi Pistaferri
Host Institution (HI) Istituto Einaudi per l'Economia e la Finanza
Call Details Starting Grant (StG), SH1, ERC-2011-StG_20101124
Summary "Whenever markets fail to offer perfect insurance possibilities, consumers and firms, separately or jointly, will develop ways to reduce their intertemporal exposure to risk. The goal of this proposal is to use new empirical strategies and newly available microeconomic data to understand the behavioral, organizational, and contractual responses to uncertainty by consumers and firms, to describe their logic, to assess their effectiveness and their potential drawbacks. The proposal is composed of six lines of work. The first tests whether consumption responds to permanent shocks using exogenous firm closure as a proxy for permanent shocks. The second studies consumption insurance in the presence of family labor supply allowing for non-separable preferences. The third studies the importance of peer effects on consumption using a better definition of peers (co-workers) and an identification strategy robust to the reflection problem. The fourth project evaluates the behavioral effects of introducing lifetime limits on welfare use. Several European countries are contemplating introducing such limits and hence this research is timely. The fifth project is on climate volatility changes and farmers’ precautionary behavior (with particular reference to developing country). The theory of precautionary behavior suggests that farmers should respond to increase weather volatility by adopting procedures that reduce their exposure to its increased riskiness. Do we observe such behavior emerging in practice? The sixth and final last set of projects will use longitudinal employer-employee data to address questions regarding what happens within the “black box” of a firm. For example, do firms shape intertemporal wage contract to redistribute payment to production factors over time? Does workforce diversity affect firm productivity?"
Summary
"Whenever markets fail to offer perfect insurance possibilities, consumers and firms, separately or jointly, will develop ways to reduce their intertemporal exposure to risk. The goal of this proposal is to use new empirical strategies and newly available microeconomic data to understand the behavioral, organizational, and contractual responses to uncertainty by consumers and firms, to describe their logic, to assess their effectiveness and their potential drawbacks. The proposal is composed of six lines of work. The first tests whether consumption responds to permanent shocks using exogenous firm closure as a proxy for permanent shocks. The second studies consumption insurance in the presence of family labor supply allowing for non-separable preferences. The third studies the importance of peer effects on consumption using a better definition of peers (co-workers) and an identification strategy robust to the reflection problem. The fourth project evaluates the behavioral effects of introducing lifetime limits on welfare use. Several European countries are contemplating introducing such limits and hence this research is timely. The fifth project is on climate volatility changes and farmers’ precautionary behavior (with particular reference to developing country). The theory of precautionary behavior suggests that farmers should respond to increase weather volatility by adopting procedures that reduce their exposure to its increased riskiness. Do we observe such behavior emerging in practice? The sixth and final last set of projects will use longitudinal employer-employee data to address questions regarding what happens within the “black box” of a firm. For example, do firms shape intertemporal wage contract to redistribute payment to production factors over time? Does workforce diversity affect firm productivity?"
Max ERC Funding
1 480 022 €
Duration
Start date: 2011-12-01, End date: 2016-11-30