The Bendheim Center for Finance engages in several research related initiatives.
Princeton Initiative: Macro, Money and Finance
Following the Princeton tradition of incorporating financial frictions in macroeconomic models – scholars like Ben Bernanke come to mind – The Princeton Initiative Camp brings together top 2nd year Ph.D. students who wish to write a Ph.D. thesis at the intersections between Macroeconomics and Finance. The recent experience starting with the run-up of imbalances and bubbles in the first decade of the 21st century, followed by a severe financial crisis that ultimately led to the Great Recession, calls for new frameworks to study macro-prudential policy tools and to design a new international financial architecture. The aim of this meeting is to bridge the gap between modern finance and macroeconomics and expose the best students from across the country to macroeconomic models with financial frictions and /or non-standard expectations.
Trinity Network Initiative
Network for the Study of the “Macroeconomic Policy Trinity”–Monetary, Financial and Fiscal Stability is the development of a research network to study interactions among monetary, financial, and fiscal stabilization policies. The “trinity network” would be run by the Bundesbank, possibly in cooperation with the Swedish Riksbank and the Federal Reserve Bank of New York. The network will also draw on researchers from other central banks and from a variety of academic institutions. Its main coordinators are Eric Leeper and Markus Brunnermeier.
More specifically, the aim is to develop a suite of theoretical models that shed light on how the trinity of aggregate policies jointly determine macroeconomic outcomes, and then to use time series data to estimate or calibrate the models to deliver quantitative predictions. Only by studying the trio jointly can we understand their interactions, accurately interpret data, and ultimately arrive at policy conclusions. The network shall pursue the two prongs of teaching and research to achieve this objective. The teaching prong exposes a wide range of established and developing researches to the variety of tools, analytical approaches and empirical techniques being used to study the trinity of policies. A research prong encourages and nurtures frontier research that focuses on a common set of questions with the goals of publishing the output in professional outlets and bringing fresh research insights to policy makers.
BCF China Initiative
The Princeton-BCF China initiative aims to develop an interface for facilitating collaborative research and academic exchanges between faculty and students in Princeton and China. This initiative serves the quickly growing demands from academic and policy communities across the world to systematically study the Chinese economy and its financial system and the risks and opportunities it presents to the global economy. Despite having the 2nd largest economy in the world, China has a very different institutional structure from most western countries. Princeton economists can substantially benefit from interacting with local scholars and researchers in China, who tend to have better institutional knowledge about the Chinese economy and better access to Chinese economic data. At the same time, local academics can also learn from Princeton economists, who have better understanding of fundamental economics concepts and more rigorous training in modern economic analysis methods. This initiative tries to bridge these gaps and provide an intellectual interface between researchers in China and top academics at Princeton. It also aims to provide a platform for both graduate and undergraduate students in Princeton to visit China and study China.
The Princeton-BCF China initiative will be coordinated by Wei Xiong, Hugh Leander and Mary Trumbull Adams Professor in Finance and Professor of Economics together with the director of BCF.