In 2014, the EUI Economics Department instituted a prize for researchers' best end of first-year summer reports. As of 2019, this prize is awarded for the best second year paper and presentation. The prize is meant to provide a further incentive to the researchers to write a compelling paper, which would become one of their thesis chapters.
Tuna Abay has received the prize for his winning paper entitled, Slavery, Innovation, and Growth.
The paper investigates the long-term effects of slavery on innovation and growth in the US, with an endogenous growth model. Historical data demonstrates that the Southern farms were less capital-intensive, and there were fewer patents in enslaved labour-intensive tasks than in similar tasks operating with free labour.
The quantitative analysis of the model shows that the growth rate would be 2.2 pp. higher if the abolishment brought complete equality in the post-bellum decades.
Daniel Prosi also received the prize for his winning paper entitled, Foreign Direct Investment and Domestic Production Networks.
The paper presents a tractable general-equilibrium model with a production network of intermediate inputs to study the effect of a foreign entrant on an existing domestic economy. Firms engage in monopolistic competition and exploit their market power taking into account their position in the network.
Using data on Foreign Direct Investment, firms' balance sheets, and VAT data on firm-to-firm linkages in a Sub-Sahara African country, Prosi observes in which network positions foreign firms enter and conduct comparative statics to examine how their entry impacts domestic firms in the model environment. On average, foreign firms enter in network positions that are associated with higher market power than domestic firms.