12 Jul 2016

SAFE scholars receive research funding

Several SAFE researchers have been awarded external funding by the Friedrich Flick Förderungsstiftung. Christian Hirsch (Goethe University), Viral Acharya (NYU Stern), Tim Eisert (Erasmus University Rotterdam) and Christian Eufinger (IESE Business School, University of Navarra) will receive funding over a period of two years for the research project "Whatever it takes: the real effects of unconventional monetary policy".

The project aims at investigating whether the unconventional monetary policy measures of the European Central Bank were able to mitigate the negative real effects of bank lending behavior during the European sovereign debt crisis. Previous research suggests that the negative real effects were indeed caused by contraction in bank loan supply as opposed to a lower demand for bank loans. Furthermore, the project will investigate how the transmission channel works, that is whether effects are purely driven by a change in the macroeconomic outlook (and thus possibly a change in the demand for loans) or whether also an increase in loan supply contributed to the recovery in the periphery of the Eurozone.


Furthermore, SAFE has been able to win a two-year individual Marie Sklodowska-Curie fellowship for Michele Costola to develop a new European early warning system to identify and signal economic vulnerabilities. The aim of the EARLINESS.eu project is to implement an early warning system for systemic risk to prevent and mitigate financial instability by exploiting the linkages among the financial markets and the real economy. The innovative purpose of EARLINESS is to model nonlinear interactions between the financial market and the macroeconomic system. The main challenge is to set up a comprehensive system able to detect and measure each marginal change in the sources of systemic risk by developing an innovative building block structure. The project can deliver an important contribution to designing mechanisms for macroprudential tools.