DFG sponsors Research Project

The German research foundation (DFG) is funding the project "Continuous-Time Modeling of Dynamic, Stochastic Equilibrium Models – Theory and Applications“ for 3 more years. This project is intended to develop the New-Keynesian model in continuous time to provide new insights on the effects of different monetary interventions and fiscal measures, and their effects on financial markets and the real economy. The focus will be on a joint analysis of fiscal and monetary policy, in particular implementing the fiscal theory of the price level (FTPL), and including financial frictions to develop new strategies for monetary and fiscal policy to cope with future financial crises, or even circumvent them. [Phase 2]

DFG Research Project: Phase 1