• Isaac Baley, professor of Economics at Pompeu Fabra University, has been recognised for his research that connects the decisions of firms and workers to developments in the wider economy
  • His work analyses the way in which uncertainty, adjustment costs and other frictions influence investment decisions, employment and pricing, and explores the implications of those decisions for economic policy
  • Josep Oliu, Chairman of Banco Sabadell and its Foundation, will present the award of this twenty-fifth edition in Oviedo on 5 October.

22 September 2026

The economist Isaac Baley, professor of Economics at Pompeu Fabra University (UPF), affiliated professor at the Barcelona School of Economics (BSE) and associate researcher at Centre de Recerca en Economia Internacional (CREI), has been selected as the recipient of the 25th Banco Sabadell Foundation Award for Economic Research for his extensive research that aims to understand how decisions made by firms and workers determine the economy’s response to crises, technological changes and economic policy reforms.

The panel, presided over by Teresa García-Milà, specifically praised Baley’s contribution to modern macroeconomics, with his detailed research into the heterogeneity between firms and workers. One of the core themes of his research is that firms and workers cannot adapt immediately or without costs when their economic environment changes: firms have to deal with imperfect information, so the process of adjusting prices and making investments can be costly, and some decisions cannot easily be reversed. As for workers, they need time to find new employment and they cannot always transfer their skills from one job to another. These frictions help to explain why some economic changes quickly spread while others have long-lasting consequences and why the same policy can have different effects on firms and workers.

The panel also emphasised that the use of microeconomic data in Baley’s research “allows economists and public policy drafters to anticipate the impact of economic measures, make capital allocation more efficient and evaluate tax reform trade-offs”.

The different areas of Baley’s research all seek to answer the same question: how do the frictions that affect individual decision-making translate into outcomes for the wider economy? Where firms are concerned, he looks at how imperfect information, adjustment costs and irreversibility affect investments and price-setting. In terms of the labour market, he analyses how job searching, occupational switching and skill mismatches determine the consequences of technological changes. His third line of research explores data such as economic resources, looking at how these can improve predictions and productivity, and also at how their accumulation and control can affect competition. The last of these areas is at the core of his book “The Data Economy: Tools and Applications”, co-written with Laura Veldkamp and published by Princeton University Press in 2025.

“I am interested in understanding what happens when the economy changes too fast for firms and workers to keep up, and why they react differently to the same change. These differences help to explain why some shocks are quickly absorbed while others leave long-lasting effects, and also why the same policy can have different effects on firms and workers,” explained Baley, who added that “understanding these mechanisms is vital to design and more accurately evaluate economic policies.”

The award ceremony will take place on 5 October in Oviedo, at an event that will bring together authorities and prominent economic and business executives. The Banco Sabadell Foundation Award for Economic Research, created in 2001, is awarded every year to researchers up to the age of 42 whose scientific papers have made a profound contribution to economic analysis. This year marks the twenty-fifth edition of the award, making it a well-established accolade for emerging research talent in Spain.

Josep Oliu, Chairman of Banco Sabadell and its Foundation, noted that “in a particularly significant edition, which marks this award’s twenty-fifth anniversary, we recognise an extraordinary research career that has made a profound contribution to economic knowledge and to the analysis of some of the biggest challenges facing our societies”. Oliu also praised the way in which Baley’s research is able to connect academic rigour to topics that are vital for economic decision-making and the design of public policy.

An international research journey that seeks to predict the impact of economic policy

Born in Mexico, Isaac Baley has a doctorate in Economics from New York University (NYU) and a master’s degree in Economic Theory from Mexico’s autonomous technology institute, Instituto Tecnológico Autónomo de México (ITAM). He is a professor of Economics at Pompeu Fabra University, associate researcher at Centre de Recerca en Economia Internacional (CREI), affiliated professor at the Barcelona School of Economics (BSE), and a research fellow at the Centre for Economic Policy Research (CEPR).

His scientific papers have been published in top international academic magazines, including Econometrica, Journal of Political Economy and The Review of Economic Studies, and they have been selected for highly competitive research awards including the Marie Curie Fellowship and the ERC Starting Grant.

In addition to his research work, Baley is devoted to contributing to the training of young economists. He has led several doctoral theses and is currently Head of Teaching Innovation at the Department of Economics and Business at Pompeu Fabra University, where he promotes new learning methodologies and peer mentorship programmes. His work received the Excellence Recognition Award from UPF’s Teaching Innovation Program in 2026 and the Excellence in Teaching Award from the European Economic Association in 2022.

Panel of judges for the 25th Banco Sabadell Foundation Award for Economic Research

The panel of judges for the award is presided over by Dr Teresa García-Milà, who is joined by Dr Javier Andrés, Dr Antonio Cabrales, Dr Bruno Cassiman, Dr Natalia Fabra, Dr Nagore Iriberri, Dr Núria Mas, Dr Diego Puga and Dr Marta Reynal-Querol.

About the Banco Sabadell Foundation

The mission of the Banco Sabadell Foundation is to promote culture and the arts, research, and education. It was created in 1994 as an embodiment of Banco Sabadell’s commitment to the progress and wellbeing of people and with the aim of becoming a benchmark and an advocate for change and innovation, serving the general interest and social cohesion by acting as a driver of excellence, creativity and innovation, focusing particularly on promoting young talent.