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Integrated Macro-Financial Modelling for Robust Policy Design

Objective

During the global financial crisis and ensuing Great Recession, economists at policy-making institutions had little choice but to augment macroeconomic models with ad-hoc assumptions and adjustments in order to provide analysis and advice for policy makers. Our consortium’s proposal aims to move policy-focused macroeconomic modelling beyond this approach to the endogenous modelling of the dynamics resulting from financial risks and related decision making in banks, households, firms and public institutions. We bring together four broad lines of research to systematically develop new behavioural and institutional building blocks, integrating them in policy-focused macroeconomic models and using these models in a new framework for policy evaluation. In terms of building blocks, one line of research moves beyond the assumption of representative and homo-oeconomicus-type agents to incorporate micro-behavioural realism in decision making, while a second line of research advances the modelling of financial institutions, their fragility and the dynamics of systemic risk. The third line of research integrates these new building blocks (including a selection of those developed by researchers outside the consortium) in a new generation of policy-focused macroeconomic models. In parallel, in the fourth line of research new policy evaluation tools are developed, with a focus on robust tools aimed at containing financial contagion and boom-bust cycles, maintaining fiscal sustainability and coordinating monetary, fiscal and regulatory policies in normal and crisis regimes. The consortium comprises researchers with a strong track record in advancing the frontier on behavioural and institutional modelling, highly influential macroeconomic modellers as well as seasoned veterans of model-based monetary, fiscal, and regulatory policy evaluation and design. Consortium members have strong academic backgrounds as well as substantive practical experience at policy-making institutions.

Field of science

  • /social sciences/other social sciences/social sciences interdisciplinary/sustainable development

Call for proposal

FP7-SSH-2013-2
See other projects for this call

Funding Scheme

CP-FP - Small or medium-scale focused research project

Coordinator

UNIVERSITEIT VAN AMSTERDAM
Address
Spui 21
1012WX Amsterdam
Netherlands
Activity type
Higher or Secondary Education Establishments
EU contribution
€ 527 000
Administrative Contact
Teresa Klerkx (Ms.)

Participants (11)

Centre Pour La Recherche Economique Et Ses Applications
France
EU contribution
€ 277 000
Address
Boulevard Jourdan 48
75014 Paris
Activity type
Research Organisations
Administrative Contact
Daniel Cohen (Prof.)
JRC -JOINT RESEARCH CENTRE- EUROPEAN COMMISSION
Belgium
EU contribution
€ 144 000
Address
Rue De La Loi 200
1049 Brussels
Activity type
Research Organisations
Administrative Contact
David Walker (Mr.)
UNIVERSITA DEGLI STUDI DI PAVIA
Italy
EU contribution
€ 134 000
Address
Strada Nuova 65
27100 Pavia
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Sofia Baggini (Dr.)
UNIVERSITY OF SURREY
United Kingdom
EU contribution
€ 139 000
Address
Stag Hill
GU2 7XH Guildford
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Maria Sega-Buhalis (Mrs.)
KATHOLIEKE UNIVERSITEIT LEUVEN
Belgium
EU contribution
€ 226 000
Address
Oude Markt 13
3000 Leuven
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Karolien Mariën (Ms.)
UNIVERZITA KARLOVA
Czechia
EU contribution
€ 115 000
Address
Ovocny Trh 560/5
116 36 Praha 1
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Jaroslav Nemec (Mr.)
JOHANN WOLFGANG GOETHE-UNIVERSITATFRANKFURT AM MAIN
Germany
EU contribution
€ 290 000
Address
Theodor W Adorno Platz 1
60323 Frankfurt Am Main
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Michael Binder (Prof.)
UNIVERSITA CATTOLICA DEL SACRO CUORE
Italy
EU contribution
€ 244 000
Address
Largo Gemelli 1
20123 Milano
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Guido Castelli (Dr.)
AGENCIA ESTATAL CONSEJO SUPERIOR DEINVESTIGACIONES CIENTIFICAS
Spain
EU contribution
€ 211 000
Address
Calle Serrano 117
28006 Madrid
Activity type
Research Organisations
Administrative Contact
Ana Maria De La Fuente (Ms.)
CITY UNIVERSITY OF LONDON
United Kingdom
EU contribution
€ 139 000
Address
Northampton Square
EC1V 0HB London
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Dilly Tawakkul (Dr.)
UNIVERSITE LIBRE DE BRUXELLES
Belgium
EU contribution
€ 54 000
Address
Avenue Franklin Roosevelt 50
1050 Bruxelles
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Christine Courillon (Prof.)