MACROTRENDS_FINANCE
Financiado
Macroeconomic trends and the efficiency of financial markets
Financial markets constitute the backbone of modern economies, intermediating resources from those who have them (i.e., lenders) to those who can put them to productive use (i.e., borrowers). A defining feature of these markets is...
Financial markets constitute the backbone of modern economies, intermediating resources from those who have them (i.e., lenders) to those who can put them to productive use (i.e., borrowers). A defining feature of these markets is that lenders give up goods today in exchange for a promise to receive goods in the future. Clearly, these promises are only valuable if they are expected to be honoured. We can think of promises as being backed by collateral, which – for the purpose of this proposal – I use as a generic term to denote the stream of future income that borrowers can credibly pledge. It is an economy’s stock of collateral that determines the amount and type of promises that can be traded, and thus the ability of financial markets to intermediate resources efficiently.
In past research, I have studied the key determinants and effects of an economy’s total stock of collateral. But there is a crucial aspect of the problem that deserves further study. In a world of heterogeneous agents, what matters for the allocative efficiency of financial markets is not just the overall stock of collateral, but also its distribution across firms, sectors and countries. Moreover, this distribution is largely endogenous, as it is shaped by general equilibrium forces and is bound to change when the economy does. In this proposal, I focus on three major ongoing shifts in the global economy and their effects on the distribution of collateral and the efficiency of financial markets: (i) declining interest rates; (ii) rising market power; and (iii) shifting distribution of power across countries.
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Duración del proyecto: 63 meses
Fecha Inicio: 2022-05-19
Fecha Fin: 2027-08-31
Fecha Fin: 2027-08-31
Línea de financiación: concedida
El organismo HORIZON EUROPE notifico la concesión del proyecto el día 2022-05-19
Línea de financiación objetivo
El proyecto se financió a través de la siguiente ayuda:
ERC-2021-ADG:
ERC ADVANCED GRANTS
Cerrada
hace 3 años
Presupuesto
El presupuesto total del proyecto asciende a
1M€
Líder del proyecto
CENTRE DE RECERCA EN ECONOMIA INTERNACIONAL
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Perfil tecnológico
TRL
4-5
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4-5
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