Research Areas  

1. European Monetary Integration and International Role of the Euro

We analyse the impact of the E(M)U membership of the Central and Eastern European countries on the financial sectors and exchange rate policies. In particular, the costs and benefits of exchange rate stability against the euro and of EMU accession are scrutinized. A further focus is on the international role of the euro in Europe, the Commonwealth of Independent States, East Asia, and beyond.

2. Global and Intra-European Imbalances

The increasing flexibility of international capital flows has contributed to rising current account surpluses and deficits in both industrial countries and emerging market economies. Based on a fast growing literature on the determinants and the (possible) adjustment channels of the current global imbalances four main patterns can be identified. (1) Large imbalances between the United States and East Asia, (2) high current account deficits of the Central, Eastern and South-Eastern European countries, (3) persistent current account surpluses of the oil and raw material exporting countries, (4) within the EMU current account imbalances for instance between Germany and Greece. We scrutinize the role of monetary, fiscal and exchange rate policies for the emergence and the propagation of the current global imbalances, the impact on the economic stability and resolvent strategies during crisis.

3. East Asian Exchange Rate Policies and the Option of Currency Baskets

Traditionally, East Asia has been an informal dollar standard as most countries in the region (including Japan) have been stabilizing their exchange rates against the US dollar. Between 2001 to 2010, historically low US interest rates and strong depreciation pressure on the dollar has led to rapid reserve accumulation and monetary expansion in East Asia. While due to underdeveloped capital markets and rising intra-regional trade integration the East Asian countries have a strong incentive to continue (intra-regional) exchange rate stabilization, they might consider reducing their dependence on the dollar. Currency baskets which contain the dollar, the Japanese yen, the euro (and possibly other East Asian currencies) may be one option for the region to wean off the dollar which would imply a further increasing international role of the euro.

4. Over-Investment Theory and Financial Crises

Speculative bubbles and crises have led to a drop of interest rates to zero, high financial market instability and a ballooning of central bank balance sheets. This research project examines, on the basis of the (monetary) over-investment theory of Hayek, Wicksell, Schumpeter and Mises, the role of monetary policy for boom-and-crisis cycles and monetary policy adjustment strategies. Another focus are the sterilization policies of central banks in the emerging economies on the periphery of the world monetary system.

5. Political Economy of Institutions

We analyse how institutions develop as results of individual choices and how institutions in turn shape the actions of individuals. We investigate rule structures and their enforcement mechanisms in various contemporary and historical contexts of social interaction such as the political sphere, markets, sports, or crime. Thereby we pay special attention to decentrally evolved and enforced institutions. Current research projects deal with the Hanseatic League, the market for kidnap insurance, informal rules in hockey, and the sale of public offices.

letzte Änderung: 04.01.2016