Major challenges for Spanish society and economic policies
Summary
This project is the continuation of previous research, partly supported by funds from public calls, undertaken by a wide array of researchers organized around two consolidated working groups with extensive experience on their own and interdisciplinary collaboration with members of other universities and prestigious research centers. The multidisciplinary nature of the team has resulted in the past in a fruitful experience between researchers who, working with different methodological approaches, combine a rigorous analysis of the available evidence (current and historical) and its interpretation within the framework of state-of-the-art macroeconomic models. In this specific project, we aim to continue with our past work addressing the determinants and economic impact of two global trends that will shape our immediate future: the transition to a socially and environmentally neutral economy and the fourth industrial revolution that is giving rise to a fully-fledged digital economy. These megatrends are evolving against the backdrop of a fast demographic transition towards an aging society and of growing risks of deepening currently existing inequalities and generating new ones, territorial or otherwise.
Technological change is bound to be the main driver of the energy transition. Environmental public policies, like carbon tax or cap-and-trade quotas, among others will be needed to set this transition in motion, but new technologies are key to easing the trade-off between current and future growth (and hence between current and future generations). Innovations in this field, along with a reasonable distribution of the transition costs, are needed to generate a social consensus behind this effort. We study how the development of these technologies, and more generally those associated with the digital revolution, are likely to affect well-being and, more specifically, macroeconomic aggregates like investment, employment, public finances, financial stability, etc. Technology is of paramount importance but so are humans. Not only from a quantitative perspective (demography) but also in terms of the distribution of wealth within and across generations and territories. The green transition has become a pressing matter amid the challenges posed by accelerating aging, mostly (but not only) in advanced economies. These challenges are many, for public finances, innovation, aggregate demand, private investments, etc. Also, the human capital accumulated by the population determines its contribution to income growth. Education and investment in human capital are, now more than ever, needed to maintain the pace of productivity growth required to sustain and improve welfare levels worldwide. Human capital is also the perfect complement to digital advances to avoid the risk of many of being left behind in the wake of digital innovations.
Inequality is a major social risk, even if we succeed in facing other global trends. Evidence from past events, in which societies found themselves at similar crossroads as the ones we face now, has the potential to enlighten us on how to face these trends while mitigating some of the growing divides among individuals and territories that we have observed in the past, and preventing them from deepening. Our analysis will focus on the study of the economic roots of historical regional inequalities in some countries, as well as the causes of depopulation in Spain. All these global trends generate multiple market failures that drive a wedge between the private and social returns of social decisions. These failures call for urgent but wise public interventions of many forms, some of which are not even in the policymakers’ toolbox yet. The aim of this project is to contribute to the design of these public policies. We do so leaning on experiences from the past, that we are able to analyze better now using novel sources and methods of growing importance in Economic History, as well as through the development of new Macroeconomic models integrating the analysis of the long and the short run as well as the market failures inherent to the aforementioned megatrends.
Research team
Javier Andrés Domingo (Universitat de València, IEI)
Concha Betrán Pérez
José E. Boscá Mares (Universitat de València, IEI)
Salvador Calatayud Giner
Amparo Castelló Climent (Universitat de València, IEI)
Antonio Cubel Montesinos
Antonio Cutanda Tarín (Universitat de València)
Joaquim Cuevas Casaña
Alfonso Díez Minguela
Rafael Domenech Vilariño (Universitat de València, IEI)
Javier Ferri Carreres (Universitat de València, IEI)
Alicia Gómez Tello (Universitat de València)
Julio Martínez Galarraga
Francisco J. Medina Albaladejo
M. José Murgui García (Universitat de València)
M. Ángeles Pons Brias
M. Teresa Sanchis Llopis
Daniel A. Tirado Fabregat