In this paper, we use a two-country asymmetric model of endogenous growth in varieties, cross-country firm heterogeneity and trade (Correa-López and de Blas, 2021) to explore the quantitative effects of policy shifts in both, the balanced growth path and, especially, the transition between paths in the medium-term cycle. Endogenous growth is driven by embodied technical change in new intermediate varieties for the capital goods sector (Romer, 1990; Comin and Gertler, 2006). The model also features international spillovers in research. The second source of growth in the model is disembodied technological change, assumed to be exogenous. Countries trade in intermediate varieties (Comin et al., 2014; Santacreu, 2015) which are produced by heterogeneous firms (e.g. Melitz, 2003; Ghironi and Melitz, 2005; Melitz and Redding, 2014).

We analyze changes across balanced growth paths and transitional dynamics after a policy shift has occured, such as variations in iceberg costs and barriers to adoption, among others. Very preliminary results show that a permanent shift in iceberg transportation costs at the Home country generates a strong and gradual contraction in real GDP and wages of Foreign relative to Home. The adjustment is more dramatic in investment and imported varieties. We also observe a sharp reduction in stock of adopted varieties at Foreign, and indication of a widening of the technology gap.

Regarding the transitional dynamics, we find that a bilateral trade restrictiveness has asymmetric effects across countries, being the degree of interdependence of countries the key driver. Worldwide trade is affected negatively: there is a contraction in the number of varieties both imported and exported. All this widens the technology gap between Home and Foreign. Finally, in welfare terms, Home is better off than Foreign along the transition.

Storage and Renewable Energies:

Friends or Foes?

The Interactions of Social Norms about Climate Change: Science, Institutions and Economics (joint with 

Manu García, WU Saint Louis, David Ramos Muñoz, UC3M, Angel Sánchez UC3M)

This paper takes on a well-known issue in applying the generalized Lorenz (GL) dominance as a welfare ranking criterion, proposes absolution and provides a characterization. The issue is the lack of equity-efficiency trade-off in the GL dominance and the cause is the inclusion of inequality-neutral social welfare function (SWF) in the set of SWFs that support the GL dominance. We propose to set a minimum inequality aversion and derive an extended dominance condition which is simply the GL dominance condition applied to utility profiles instead of income profiles. The extended condition is equivalent to Meyerís (1977) second degree stochastic dominance with respect to a function and it can be characterized by a sequence of the Diamond-Stiglitz (1974) type mean-utility-preserving transfers of income.

We illustrate the extended GL dominance and its associated Lorenz dominance with the US income data. Finally, we briefly outline how the newly developed idea of "almost dominance" (Leshno and Levy, 2002; Zheng, 2018) can be further utilized to make the GL dominance a more versatile tool for welfare evaluation.

This paper studies the effect of a randomised educational intervention aimed at increasing perseverance in the classroom on cognitive outcomes, beliefs and attitudes towards learning. The trial is carried out in 100 primary schools in England. The subjects are Year 6 pupils who are introduced to the idea of resilience, perseverance and incremental intelligence by their teachers over several sessions. Pupils in the intervention group have significantly lower perception that their intelligence is a fixed trait. The intervention also has a small positive effect on the positive attitude towards learning of treated pupils. However, unlike other related trials in psychology, education and economics, our analysis finds that the intervention has no impact on literacy nor numeracy overall, and that this applies across all pupils including those eligible for Free School Meals.

Luisa Lambertini ,EPFL;

 and Serhiy Stepanchuk, U Southampton)