The project seeks theoretical and empirical insight on how and why credit is shifting from financing investment to boosting leverage in sunset industries and mortgage markets.

Effectiveness of policy

The findings will be valuable to reassess the effectiveness of regulatory and monetary policy, and will contribute to Perotti's position as an advisory member of the European Systemic Risk Board at the European Central Bank.
The grant will primarily fund junior researchers as well as international conference and doctoral summer school programme. The project involves a wide dissemination programme targeting a broader audience in society.

Professor Eric Bartelsman of the VU Amsterdam and the University of Bonn’s professor Moritz Schularitz will be closely associated with the research plan.