The first related line of the research is to study the aggregate characteristics of the European business cycles, with the aim of establishing the “main facts” concerning these cycles (the dating of turning points, co-movements between aggregates in different countries, possible asymmetries of expansions and recessions). The second line of research involves the study of fluctuations at more dissegrated levels – that of the region, the sector, or the firm – in order to deepen our understanding of the link between aggregate behavior and “microdynamics”. The third line of research involves developing techniques suitable for comparing the characteristics of cycles, which we observe in practice (established in the first line of research) with the predictions of existing equilibrium macroeconomic models. The aim here is to discriminate more clearly between different classes of models in terms of their ability to account for the important features of observed cyclical fluctuations.

The network will aim to integrate research focusing on these three research topics. The aim is to ensure that the empirical questions will be framed within a coherent macro-theoretic framework, ant that, in turn, the models will be confronted with facts. The network will aim to achieve significant methodological advances, in particular in the analysis of the dynamics of large cross-sections, and in the development of time-series method suitable for the identification and estimation of the European Business cycle.

The network will extend the analysis of multinational corporations (MNCs) examine the economic impact of MNCs and FDI on the home and the host countries, and explore both national and international policy implications. The starting point is research on the determinants of multinational activity at the level of the firm, and on the relationship between foreign trade and multinational activity. On the basis of this the network will explore the implications of FDI for both the home and the host employ and analyze policy towards FDI. The research will employ theoretical techniques econometric analysis and case study methods.

The aim of this network is to bring together, over a four-year period, some of the best known researchers in Europe to advance the frontiers of Political Economy. The common research approach is to use modern tools from game theory and contract theory to improve our general understanding of political institutions and their specific implications for economic policy. The research program also aims to explore the role of political coalitions, which as both political and economic theory stress, play an important role in influencing specific public policy decisions. These coalitions can form along many dimensions: region of residence, occupation, sector of work, level of income, etc. The research aims to explore the idea that different political institutions create different incentives to form coalitions along particular dimensions. This implies another, indirect channel whereby political institutions shape actual policy-making. Specific themes explored by the network include the theoretical foundations for the separations of powers; monitoring public agencies; monetary policy and central banking; redistributive policy and income distribution; institutional reform and transition; federal political structures; and political institutions and European Integration.

This project aims to develop a consensus on the analytical frameworks which are appropriate to analyze the relationship between the process of globalization and the twin inequalities of incomes and of access to jobs, two key factors affecting social exclusion. The network will therefore address two key aspects of the Work Program for the TSER Program: the relationship between employment and technical change and developing new analytical approaches for identifying key mechanisms (such as unemployment and income inequalities) which produce social exclusion .The goal is to develop a coherent framework for the analysis of the causes of unemployment, which takes into account factors such as international trade, market integration and globalization, and "skills-biased" technological change. The network will also contribute to our understanding of the patterns of unemployment and social exclusion, by bringing together researchers working in the fields of international trade and labor economics with specialists in income distribution, focusing in particular on the relationship between inequality in the distribution of wages and the distribution of incomes across households. This relationship appears to be an important factor in explaining the very different ways in which inequality manifests itself in Europe and the United States.