CBS receives two grants from the EU of more than DKK 18 million

How is the economy controlled when things do not work out the way they are supposed to and how has stability been sought in the financial markets?



How is the economy controlled when things do not work out the way they are supposed to? And how has stability been sought in the financial markets? 

The European Research Council (ERC) has granted more than EUR 2 million for two research projects at CBS within economy and sociology, which have placed focus on the above questions.


ERC has just announced that Lasse Heje Pedersen, Professor from the Department of Finance at CBS, and Poul Fritz Kjær, who will be affiliated with the Department of Business and Politics at CBS, will receive research funding from the EU for the next four years. The exact amount is still unknown, but is somewhere between EUR 1.2 and 1.4 million per project.



The competition to receive one of the prestigious ERC Starting Grants is fierce. More than 5,000 researchers have applied, but only 536 young European top researchers have received grants from the ERC, whose aim is to promote excellent research.


From corporatism to governance

Sociology, economy, history and law are united in one of the ERC-funded research projects. The project belongs to Poul Fritz Kjær and is named ”Institutional Transformation in European Political Economy - A Socio-Legal Approach”. He is studying how Europeans have attempted to stabilise the relation between political and economic interests.

Poul Fritz Kjær has a degree in political science from Aarhus University, a PhD in law from Florence and is applying the finishing touches to his doctoral thesis in Frankfurt.



”I will be conducting research within the institutional changes of the past 150 years with a view to discovering the motive forces behind the interaction between politics and economics. The relation between political and economic processes has always been a central part of social science research. Earlier the focus was placed on corporatism and neo-corporatism, but in the past two decades the focus has shifted to the concept of governance, which plays a central part in understanding how the relation between politics and economics is institutionalised", says Poul Fritz Kjær.


Grit in the economic machinery

Professor Lasse Heje Pedersen's project about financial frictions has also received a grant from ERC. The purpose of his project is to study the possibility of controlling risk-taking and price fixing of shares and bonds. In popular terms, the project is about studying what happens when the financial markets experience grit in the machinery and how to handle the problems that arise when the markets fail to develop as intended. Naturally, the research is of great interest at the moment due to the financial crisis.


"The competitive markets generate growth when people make choices and take risks, but markets depend on adequate liquidity and well-functioning financial institutions. And what happens when grit are thrown into the machinery in the financial markets - when investors or companies are not able to borrow as much as they need because of a bank crisis? Or when the transaction costs increase and it becomes too expensive to trade? My project is about further developing the economic theories that take these frictions into account and test them empirically", says Lasse Heje Pedersen.


Earlier this year, Lasse Heje Pedersen received the Bernácer Award for being the best European economist under 40 because of his past research, which contributes to the understanding of how financial crises arise.



The page was last edited by: Department of Finance // 04/12/2013