Globalization and European integration

Overview: The Department
Department
Macroeconomics

Research Area

Globalization and European integration


Research profile

The effects of economic policies on the economic outcome in terms of production, employment and inflation are evaluated by macroeconometric models. In general, multi-country models are preferred to account for the ongoing integration of the world economy. The model portfolio is permanently expanded to cover the state-of-the-art. This includes the specification of CGE (Computable General Equilibrium) models for sectoral and distributional analysis as well as DSGE (Dynamic Stochastic General Equilibrium) models to study adjustment processes. Both types of models are less subject to the Lucas critique of policy dependent parameter regimes and can increase the quality of policy consulting.

The department has many years of experience in the model building sector. As such, it developed an international macroeconomic model for Germany's Federal Ministry of Finance. For the European Commission, it also evaluated alternative model approaches for their ability to assess reforms made in the framework of the Lisbon Strategy. The current expansion of the model portfolio is undertaken with the financial support of the Leibniz Gemeinschaft. The department works in close collaboration with the department of Energy, Transport and Environment, Global Insight, and the Université libre de Bruxelles.