Crises and inequality: a financial-markets perspective

The project will build knowledge concerning financial stability and how it interacts with economic inequality during, and as a result of, economic crises.

The research team has members at two different higher education institutions in Stockholm: (A) a group of researchers in finance and macroeconomics working at different departments within Stockholm University (SU), on the one hand, and (B) a group at Swedish House of Finance (SHoF, which belongs to Stockholm School of Economics).

The broad scientific goal is to develop tools and insights aimed at policymaking: how we can attain better outcomes as economic crises hit our economy, thus maintaining the overall level of welfare in the short as well as long run and ensuring that inequality remains under control.

A number of projects are first carried out in parallel and the collaboration will then be enlarged and connect the microeconomic aspects of the project with the macroeconomic ones.

In the first phase, the collection and analysis of microeconomic data will be carried out separately from that concerning theoretical macroeconomic mechanisms, and in the second phase the two will be merged. All stages of the project are basic research.

The two methodological pillars, on which the project rests are thus intense use of microeconomic data and the development of complex micro- and macroeconomic models with important nonlinear, dynamic, and stochastic elements. On all these fronts, the research team is very well equipped.