Macro Finance

In the department Macro Finance, research focuses on the interaction between the overall economy and the financial system. Shocks in the real economy (e.g., energy costs) affect the market prices of goods and services which then has an impact on the financial system, e.g., through firms' demand for investment or households' saving behavior. This in turn has consequences for the real economy. Thus, there are interactions and a possible amplification of the original shocks. In extreme cases, financial crises occur, leading to large economic costs. The same applies to shocks in the financial economy, e.g., due to changes in monetary policy: Changes in nominal interest rates lead to new (real) decisions in investment and consumption. These interactions are steered by regulatory policies, such as pension policy, energy transition or public debt policy. Particular attention is paid to the influence of the financial architecture and its actors (banks, stock exchanges, central banks, sovereigns) on economic activity and distribution. A precise understanding of these interrelationships requires both a macroeconomic and a microeconomic perspective, the empirical investigation of existing phenomena as well as theoretical analysis with simulations and forecasts. The department management is currently in occupation, so that a precise formulation of the main topics in this comprehensive subject can only be made later.