Labor market integration policies and the convergence of regions: the role of skills and technology diffusion

We study the role of different labor market integration policies on economic performance and convergence of two distinct regions in an agent-based model. Production is characterized by a complementarity between the quality of the capital stock and the specific skills of workers using the capital stock. Hence, productivity changes in a region are influenced both by the investment of local firms in high quality capital goods and by the evolution of the specific skill distribution of workers employed in the region. We show that various labor market integration policies yield, via differing regional worker flows, to distinct regional distributions of specific skills. Through this mechanism, relative regional prices are affected, determining the shares that the regions can capture from overall consumption good demand. There occurs a trade-off between aggregate output and convergence of regions with closed labor markets resulting in relatively high convergence but low output, and more integrated labor markets yielding higher output but lower convergence. Furthermore, results differ substantially in several respects as distinct labor market opening policies are applied.     

‘I Like How You Think’: Similarity as an Interaction Bias in the Investor–Entrepreneur Dyad

Investigating the factors that influence venture capital decision‐making has a long tradition in the management and entrepreneurship literatures. However, few studies have considered the factors that might bias an investment decision in a way that is idiosyncratic to a given investor–entrepreneur dyad. We do so in this study. Specifically, we build from the literature on the ‘similarity effect’ to investigate the extent to which decision‐making process similarity (shared between the investor and the entrepreneur) might bias or otherwise impact the investor's evaluation of a new venture investment opportunity. Our findings suggest venture capitalists evaluate more favourably opportunities represented by entrepreneurs who ‘think’ in ways similar to their own. Moreover, in the presence of decision‐making process similarity, the impacts of other factors that inform the investment decision actually change in counter‐intuitive ways.     

How to design virus containment policies? A joint analysis of economic and epidemic dynamics under the COVID-19 pandemic

Journal of Economic Interaction and Coordination - We analyze the impact of different designs of COVID-19-related lockdown policies on economic loss and mortality using a micro-level simulation...