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Micro-level responses to socio-economic challenges in face of global uncertainties

Project promoter: Vilnius University
Project title: Micro-level responses to socio-economic challenges in face of global uncertainties
Project code: LT08-1-ŠMSM-K01-010 (Project contract No S-BMT-21-8 (LT08-2-LMT-K-01-073))
Project eligible expenditure: EUR 843309,61 (EUR 716813,17 grant from the EEA Financial Mechanism and EUR 126496,44 budget co-financing) 
Project signature date: 20 January 2021
Project implementation period: 1 January 2021 - 31 December 202
Project partners: 
BI Norwegian Business School (NO)
Baltic International Centre for Economic Policy Studies (LV)
University of Tartu (EE)      
Tallinn University of Technology (EE) 
Project website

Project summary:
What this project is about? 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.
The goal of this project is 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 results of the project might 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.

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