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Welfare Effects and Policy Implications of Automation in the Global Economy

Joint work with: Hayato Kato (Japan External Trade Organization)

Abstract

Automation shifts income from workers to capital owners and raises income inequality. Can governments turn automation into a welfare gain by adjusting the tax and transfer system or should they restrict automation? We study this question in a setting where capital can move across borders and governments set capital taxes strategically. We derive a sufficient statistics formula for the welfare effects of automation under optimal taxes and assess it quantitatively, showing that negative welfare effects of automation are plausible. Yet, seizing the implied welfare gains requires globally coordinated restrictions on automation, as unilateral policies prove ineffective. The optimal global policy, however, is a cooperative capital tax policy and we show that the welfare gains from such cooperation rise with automation.

About the speaker

is an Assistant Professor of Economics at LMU Munich. He obtained his PhD at the 8xav福利导航 of Cologne in 2020. His research focuses on the fields of macroeconomics and public economics. He is especially interested in economic inequality, its sources, and the efficient design of redistribution policy. His research includes work on directed technical change theory, automation, and the design of income tax and transfer systems. Most of his current work focuses on the welfare and policy implications of automation.

Language

English

This is a free seminar. Registration is mandatory.

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The Commercial Value of (Cut) Science

Abstract

The economic case for publicly funding science rests on the commercial value its discoveries create through invention, yet that value is known only in the aggregate. We measure it one publication at a time: we attribute the market value of patented inventions backward through a citation network of half a billion papers and patents, project each publication’s spillover forward to thirty years, and attach the result to the grants that paid for the research.

Per dollar of funding, NSF and NIH grants return many multiples of their public investment. Most of the value travels through indirect citation links rather than direct ones, and more than half is realized on inventions made abroad.

The commercial benefits of science arrive slowly: a research dollar breaks even only after about a decade. Applied to the grants terminated in 2025 by the US administration, every dollar saved in cut funding forgoes several dollars of future spillover value.

About the speaker

is Assistant Professor at the department of Knowledge, Technology and Organization (KTO) at SKEMA Business School (Universit茅 C么te d’Azur, GREDEG). He is also a Research Associate at the Centre for Economic Performance at the London School of Economics and a Research Fellow at KU Leuven.

His research is in the economics of innovation and science and asks how the resources devoted to discovery can be allocated better. Current projects study the returns to public science funding, industrial policy for innovation, the effect of air pollution on inventive productivity, knowledge diversity in inventor teams, and the gender productivity gap in science. Earlier work developed patent-based measures of technological novelty that can be used to identify radical inventions. His research has appeared in Research Policy, the Journal of Environmental Economics and Management, and the International Journal of Industrial Organization. He holds a PhD in Applied Economics from KU Leuven. Before joining SKEMA he was a Research Officer at the London School of Economics, a post-doctoral fellow of the Research Foundation Flanders at KU Leuven, and a Marie Sk艂odowska-Curie Individual Fellow at Bocconi 8xav福利导航.

Language

English

This is a free seminar. Registration is mandatory.

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Work from Home and the Evolution of Cities

Joint work with: Brian Greaney and Stijn Van Nieuwerburgh

Abstract

We study how the rapid rise of work from home (WFH) since 2020 has transformed cities and affected the welfare of their residents. We develop a dynamic spatial model with forward-looking households who choose residential location, workplace location, housing tenure, and WFH frequency. The model features commuting, costly migration, uninsurable income risk, housing-market frictions, commercial and residential real estate, and local public finance: local taxes fund endogenous amenities. We interpret the post-2020 economy as a transition to a new long-run spatial equilibrium and characterize the resulting paths of residential and commercial real estate prices, the locations of residents and jobs, income sorting, commuting, local tax revenues, amenities, and welfare. The model provides a framework for quantifying whether WFH triggers an urban doom loop, whereby declines in commercial real estate values erode the local tax base, reduce amenities, and further depress demand for central-city locations. We use the framework to evaluate return-to-office mandates and fiscal transfers. We also study office-to-residential conversions as a way to increase housing supply as well as speed up transition in response to the WFH shock.

About the speaker

is an assistant professor at the 8xav福利导航 of Southern California and a visiting fellow at Kyiv School of Economics. His research areas include urban and spatial economics, macroeconomics, and real estate. In his recent projects, he focuses on developing a new generation of dynamic quantitative spatial models, understanding housing supply constraints and their implications, and studying how work from home reshapes cities. Andrii completed his undergraduate studies at Kyiv National Economics 8xav福利导航 and his PhD at Universitat Autonoma de Barcelona.

Language

English

This is a free seminar. Registration is mandatory.

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The Faculty of Law, Economics and Finance is pleased to invite you to the 12th Fintech Conference.

Language

English.

This is a free conference. Registration is mandatory.

Topics/Sessions

• Agentics AI from a Multidisciplinary Perspective
• Deposit and Payments Business
• Artificial Intelligence and Financial Supervision
• AIgentics in Finance II: Identity and Data Protection
• and more!

Speakers

• Professor Caroline Kleiner (Paris)
• Professor Marina Teller (Nice)
• Professor Jean-Louis Schiltz (Luxembourg)
• Professor Dirk Zetzsche (Luxembourg)
• Professor Bob Kieffer (Luxembourg)
• and speakers from HongKong, Cambridge 8xav福利导航 Judge Business School, 8xav福利导航 of C么te d鈥橝zur and more featuring speakers affiliated with FinTech

Programme

• 09.00 – 17.30

  To be confirmed

In partnership with

The Department of Finance at the Faculty of Law, Economics and Finance and Banque de Luxembourg are pleased to invite you to the 5th Conference in Sustainable Finance.

The event is organised within the framework of the Chair in Sustainable Finance, which is supported by the Luxembourg Ministry of Finance and the Luxembourg Ministry of Environment, Climate and Biodiversity and the FNR.

Scientific committee

Papers will be selected by the program committee consisting of members of the Department of Finance at the 8xav福利导航 of Luxembourg.

Programme

Wednesday, 1 July 2026

• 20.00

  Welcome dinner for presenters and discussants

  • au P’tit Max

Thursday, 2 July 2026

• 08.45 – 09.00

  Welcome (coffee)

Session 1: Implications of Carbon Risks for Firm Valuations

Chair: Denitsa Stefanova (8xav福利导航 of Luxembourg)

• 09.00 – 09.30

  Carbon Uncertainty and Asset Prices

  Presenter: Abraham Lioui

  Discussant: Tobias Sichert (Stockholm School of Economics)

  Co-authors: Cathy Yu-Hsuan Chen 鈥� George M. Constantinides 鈥� Nilesh Hegde

• 09.30 – 10.00

  The Labor Market Effects of Carbon Pricing

  Presenter: Gazi Kabas

  Discussant: Thorsten Martin (Frankfurt School of Finance and Management)

  Co-authors: Andreas Fuster 鈥� Vincenzo Pezone 鈥� Kasper Roszbach

• 10.00 – 10.30

  Green Q: Measuring and Valuing Green and Brown Capital

  Presenter: Kevin Schneider

  Discussant: Francesca Zucchi (European Central Bank)

  Co-authors: Ilan Cooper 鈥� Daniel Kim

• 10.30 – 11.00

  Coffee break

Session 2: Insurance markets

Chair: Benjamin Holcblat (8xav福利导航 of Luxembourg)

• 11.00 – 11.30

  Natural Disasters, Property Insurance, and Housing Markets

  Presenter: Nuno Clara

  Discussant: Yasmine van der Straten (Nova School of Business and Economics)

  Co-authors: Michael Boutros 鈥� Pierre Mabille

• 11.30 – 12.00

  Insuring Climate Risks in Integrated Markets

  Presenter: Jan Starmans

  Discussant: Adelina Barbalau (8xav福利导航 of Alberta)

  Co-authors: Deeksha Gupta 鈥� Michael Sockin

• 12.00 – 14.00

  Lunch break

  • il Tocco

Session 3: Carbon Markets & Prices

Chair: Nora Paulus (8xav福利导航 of Luxembourg)

• 14.00 – 14.30

  Beyond Brown: Oil Shocks and Carbon Premium [online]

  Presenter: Shaojun Zhang

  Discussant: Valeri Sokolovski (8xav福利导航 of Alberta)

  Co-author: Zhan Shi

• 14.30 – 15.00

  Private Equity and Biodiversity Offset Markets

  Presenter: Keyu Zang

  Discussant: Florian Heeb (Leibniz Institute for Financial Research SAFE)

  Co-author: Zhimin Chen

• 15.00 – 15.15

  Coffee break

The value of information and investor behavior

Chair: Patrick Augustin (McGill 8xav福利导航)

• 15.15 – 15.45

  Strategic ESG Disclosure When Ratings Reveal Investor Preferences

  Presenter: Jan Schneemeier

  Discussant: Gu虉nter Strobl (8xav福利导航 of Vienna)

  Co-author: Adelina Barbalau

• 15.45 – 16.30

  Doing Good by Doing Nothing? Passive Ownership and Environmental Performance

  Presenter: Theresa Spickers

  Discussant: Johannes Klausmann (8xav福利导航 of Houston)

  Co-authors: Vidhan Goyal 鈥� Daniel Schmidt 鈥� Daniel Urban

• 16.30 – 17.00

  Tram ride to the Banque de Luxembourg

  • 14 Boulevard Royal
    L- 2449 Luxembourg

  • Tram stop: Hamilius

Keynote Presentations and Panel Discussion: Instruments for Climate Policy in a Fragmented World

Chair: Michael Halling (8xav福利导航 of Luxembourg)

• 17.15 – 17.20

  Welcome by the Banque de Luxembourg

• 17.20 – 17.50

  Trade Policy and International Climate Action (Keynote Presentation)

  Farid Farrokhi (Boston College)

• 17.50 – 18.20

  The economics of climate (in)action (Keynote Presentation)

  Christian Gollier (Toulouse School of Economics)

• 18.20 – 19.00

  Panel Discussion on 鈥淚nstruments for Climate Policy in a Fragmented World鈥�

  Moderator: Fran莽ois Koulischer (8xav福利导航 of Luxembourg)

  Panelists:

  • Farid Farrokhi (Boston College)
  • Christian Gollier (Toulouse School of Economics)
  • Claudia Hitaj (Ministry of the Environment, Climate and Biodiversity)
  • Pascal Husting (SteelWatch)

• 19.00

  Networking Cocktail

Contact

In collaboration with

The event is organized within the framework of the Chair in Sustainable Finance, which is supported by the Luxembourg Ministry of Finance and the Luxembourg Ministry of Environment, Climate and Biodiversity.

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This workshop examines normative limits on algorithmic control and classification鈥攂ringing labour and criminal law perspective into dialogue

Abstract

The employment relationship is built on subordination. The contract grants the employer a prerogative to direct, monitor and discipline the worker, which collective rights and the individual protections of modern labour law have historically tempered. That prerogative now extends into a domain where tasks are quantified, predicted and governed by machines. AI does not create a new authority at work but intensifies the old one: algorithmic systems generate assignments, monitor execution and evaluate output, rendering the worker into data in what has been termed the era of the quantified worker. Yet no universal model protects workers in this age.

The dynamics of algorithmic governance are not confined to the workplace. Across criminal justice systems, predictive technologies increasingly classify individuals according to inferred “risks”, propensities, and behavioural forecasts, normalising forms of intervention that precede wrongdoing itself. While algorithmic management transforms workers into datafied objects of optimisation and control, predictive criminal justice systems similarly reduce individuals to probabilistic subjects of suspicion.

Against this backdrop, the workshop will be divided into two parts. The first half of the workshop will turn to the right to refuse work 鈥� tracing its origins, history and conceptual foundations, and asking whether it remains viable in the age of AI. Drawing on the intersection of AI and occupational safety and health, it will argue for the right to refuse as a guiding principle under algorithmic management.The second half of the workshop will explore the possibility of a right to freedom from algorithmic classification as a normative limit on AI-driven governance. Grounded in concerns for autonomy, dignity, and democratic accountability, such a right would challenge the legitimacy of decisions that subject individuals to legal consequences on the basis of predictive correlations rather than conduct.

Bringing labour law and criminal law into dialogue, the workshop argues that both the right to refuse work and the right to freedom from algorithmic classification respond to a broader transformation in contemporary governance: the shift from governing conduct to governing prediction. Across distinct legal domains, algorithmic systems increasingly seek to manage individuals through continuous monitoring, evaluation and pre-emptive intervention. In this sense, both rights operate as mechanisms of resistance against emerging forms of automated social control, preserving spaces of autonomy, contestation and human agency within increasingly datafied regimes of power.

About the speakers

&

Dr Zahra Yusifli, Legal Scholar

Language

English.

This is a free hybrid event. Registration is mandatory.

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“Intangible Capital Around the World”

With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.

Abstract

We estimate the value of intangible capital around the world through the valuation approach of a neoclassical model of investment with two heterogeneous types of capital inputs: physical capital and intangible capital. Using data on public listed firms across 77 countries, we infer the importance of intangible capital for the firm’s market value in each country. We find that intangible capital accounts for over half of firms’ market value globally, with significant cross-country heterogeneity. To understand the drivers of intangible capital accumulation we explore the variation in the economic and legal environment across countries. We find that protection of intellectual property right, cost of contract enforcement significantly influence the cross-country variation in the value of intangible capital.

About the speaker

is a Professor of Finance at INSEAD. He conducts both theoretical and empirical research on the intersection of finance and macroeconomics. He is an Associate Editor of the Journal of Financial Economics, the Review of Asset Pricing Studies, and Economics Letters, a research fellow of the Center for Economic and Policy Research, a former research associate at the National Bureau of Economic Research, and a former Associate Editor of Management Science. His research is published in academic journals such as Journal of Political Economy, Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Monetary Economics, and Review of Economic Dynamics. Professor Belo holds a BSc degree in Economics from Catholic 8xav福利导航 of Portugal, an MSc in Finance and Economics from the London School of Economics, and a PhD and MBA from the 8xav福利导航 of Chicago.

Language

English.

This is a free event. Registration is mandatory.

Cold lunches are provided to registered participants only.

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Monotone Comparative Statics in Multi-Asset Portfolio Choice

Abstract

Arrow (1965) and Pratt (1964) laid the bedrock of portfolio theory by showing how risk aversion governs portfolio choice with one risky and one safe asset. Extending these insights to two risky assets proved elusive: Cass and Stiglitz (1972) and Hart (1975) showed that almost any portfolio response is possible, leaving a long-standing gap in our understanding. This paper closes that gap. It explains several empirical facts that are difficult to reconcile within the mean鈥搗ariance framework. Mean鈥搗ariance analysis is nested as a special case.

About the speaker

Language

English

This is a free seminar. Registration is mandatory.

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AI Lecture Series: Lecture 8

The Faculty of Law, Economics and Finance, in collaboration with the Interdisciplinary Centre for Security, Reliability and Trust (SnT) and the National Centre of Excellence in Research and Innovation (NCER FutureFinTech) is pleased to invite you, as part of the AI Lecture Series, to this lecture.

Abstract

Using AI for streamlining regulatory compliance solutions in financial organisations: the pros, the cons and other cogs

As financial markets become increasingly digital, globally interconnected and heavily regulated within and across jurisdictions, financial institutions are looking towards Artificial Intelligence (AI) to strengthen regulatory compliance capabilities. This lecture will explore how AI-enabled tools can be used to develop, test and maintain compliance solutions across regulated finance, including banking, trading venues, clearing and settlement systems, payment infrastructures and RegTech platforms.

Drawing on industry practices, this lecture will explore potential cases of AI use in compliance environments, these include: AI-assisted development, AI-assisted rule mapping, automated coverage analysis, regulatory change management and conformance automation frameworks. If implemented efficiently, AI-enabled compliance architectures can help connect regulatory obligations, internal rule books, testing artefacts and audit evidence into continuously traceable systems.

The session will analyse the main benefits of AI adoption in compliance functions, including faster delivery, quicker interpretation of regulatory texts, automation of repetitive control activities, improved monitoring and reporting, scalability across jurisdictions, enhanced fraud and anomaly detection and more adaptive governance processes. AI can also help organisations reduce operational burden and improve responsiveness to rapidly evolving regulations such as DORA, MiFID II, Reg SCI and AML/KYC obligations.

At the same time, the lecture will critically evaluate the limitations and risks associated with the use of AI in regulated finance. These include model opacity (鈥渂lack box鈥� decision-making), explainability challenges, hallucinations in generative AI systems, data privacy concerns, bias in automated decisions, cybersecurity vulnerabilities, vendor concentration risk and difficulties in establishing deterministic audit trails for probabilistic AI models. Regulatory bodies increasingly emphasise that accountability for compliance cannot be delegated to AI systems or external vendors 鈥� which calls for strong governance, human oversight and robust validation frameworks.

The lecture will conclude by discussing emerging heuristics for efficient AI adoption in financial compliance, including 鈥渉uman-in-the-loop鈥� governance, use of explainable AI, model risk management, traceability-by-design and continuous testing methodologies. Students will gain insight into how financial institutions can balance innovation with operational resilience, accountability and regulatory trust in an era of accelerating AI adoption.

About the speaker

is a co-founder & co-CEO of Exactpro, an independent provider of software testing services for financial sector organisations. Among other things Iosif is responsible for the AI Testing strategy and trading systems reliability research. He holds a MSc degree in Theoretical Physics.

Language

English.

This is a free event. Registration is mandatory.

Presentation

Download the presentation: Using AI for Streamlining Regulatory Compliance Solutions in Financial Organisations.

In collaboration with

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AI Lecture Series: Lecture 7

The Faculty of Law, Economics and Finance, in collaboration with the Interdisciplinary Centre for Security, Reliability and Trust (SnT) and the National Centre of Excellence in Research and Innovation (NCER FutureFinTech) is pleased to invite you, as part of the AI Lecture Series, to this lecture.

Abstract

This lecture presents recent research on legal judgment prediction and the creation of the underlying dataset, namely the Cambridge Law Corpus. The focus is on predicting claim success in the UK Employment Tribunal, whether judge identity matters for outcome prediction and the practicalities of creating large datasets for AI research.

About the speaker

is Professor of Law at the 8xav福利导航 of Cambridge and Professorial Fellow (Privileges) at Newnham College. He serves as Deputy Chair of the Faculty of Law and Co-Director of the Centre for Corporate and Commercial Law (3CL). He is Global Distinguished Professor of Law at the 8xav福利导航 of Notre Dame, Research Member of the European Corporate Governance Institute (ECGI), Principal Legal AI Advisor at Thomson Reuters and Associate Director of the TR Imperial Frontier AI Lab.

Language

English.

This is a free hybrid event. Registration is mandatory.

Lunch will be offered from 11:30.

In collaboration with