Project description
Federalising monetary policy
Central banks typically set a single interest rate that applies uniformly across their jurisdiction, which can result in suboptimal monetary policy in regions with diverse economic characteristics. Funded by the European Research Council, the FEDMONEY project will investigate the hypothesis that a federalised monetary policy, based on federal central banking structures, could modulate monetary policy differently in economically heterogeneous regions. The project will conduct a systematic legal and economic analysis of monetary federalism and explore its untold legal history in the United States and Europe. It will also consider the constitutional theories of federalism in both jurisdictions, as well as the role of decentralisation of monetary policy in the history of economic thought, to provide a comprehensive understanding of the potential benefits and challenges of a federalised monetary policy.
Objective
Monetary policy suffers from a one size fits all problem. Central banks typically determine monetary policy by setting a headline interest rate uniformly across their jurisdiction. Yet, in large jurisdictions, the optimal monetary policy on average tends to be suboptimal for economically heterogeneous regions. Outside the realm of monetary policy, a solution to this type of governance problem is widely accepted: federalism. But the state of the art has not analyzed federalism as a paradigm of monetary governance. This is curious especially because it is not uncommon for central banks to be structured institutionally according to federalist principles: split into a central headquarters and decentralized branches. Yet even then monetary policy is determined centrally and uniformly across central bank jurisdictions. FEDMONEYs research hypothesis is that it is desirable to federalize monetary policy by taking advantage of federal central banking structures to modulate monetary policy differently across economically heterogeneous regions. Its central aim is to develop a systematic legal and economic analysis of monetary federalism, which we currently lack. FEDMONEY seeks to verify its research hypothesis by writing the untold legal history of monetary federalism in the United States and Europe. It will contextualize that history in light of constitutional theories of federalism in both jurisdictions, as well as the intellectual history of economic thought. The project is groundbreaking in that it opens up new horizons for research in law, economics and beyond, and creates a powerful new tool for central banks to shape economic growth and development. FEDMONEY is urgent because central banks rediscovered monetary federalism in their responses to the past decade of economic crisis, but lack a theoretical framework grounded in law and economics to assess its costs and benefits. Absent such a framework, interest in monetary federalism is likely to fade soon.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
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Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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HORIZON.1.1 - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
HORIZON-ERC - HORIZON ERC Grants
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2022-STG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
1348 LOUVAIN LA NEUVE
Belgium
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.