4th Workshop on Financial Econometrics and Empirical Modeling of Financial Markets

After nearly a decade of extremely low interest rates, the last years have witnessed a series of extraordinary events that have introduced new and complex challenges to monetary policy and financial markets. The COVID-19 pandemic first resulted in a severe downturn of the world economy and forced central banks to keep interest rates at low levels and implement new asset purchase programs. Then, the risk of inflation, supply chain disruptions, and increased government debt levels have become top concerns. The Russian war in Ukraine has had profound geopolitical and economic repercussions. Sanctions imposed by Western countries have disrupted global trade flows, impacting energy markets and supply chains. These disruptions have contributed to heightened economic uncertainty and stagflationary pressures and highlight the importance of assessing the broader geopolitical context in monetary policy decisions and being prepared to respond to unexpected shocks.

Climate change poses a long-term challenge to monetary policy and financial markets. As the world grapples with the effects of global warming, central banks are increasingly recognizing the need to incorporate climate-related risks into their policy frameworks. Climate events, such as wildfires, floods, and hurricanes, can have severe economic consequences. Moreover, the transition to a more sustainable and green economy will require significant adjustments in various sectors. Central banks are beginning to explore ways to address these issues. They are considering climate-related stress tests for financial institutions, greener asset purchase programs, and even adjusting their collateral frameworks to reflect climate risks. Climate change emphasizes the importance of monetary policy in facilitating a transition to a more sustainable economy and managing the financial risks associated with climate change within their mandate to achieve price stability.

Another significant challenge facing monetary policy is the transformation of financial markets. Technological advancements have revolutionized the way financial assets are traded, allowing for increased speed and efficiency. Especially, the rise of digital currencies, such as Bitcoin and central bank digital currencies (CBDCs), is challenging for monetary policy. While digital currencies offer potential benefits, such as increased financial inclusion and lower transaction costs, they also raise concerns about financial stability, privacy, and the ability of central banks to implement monetary policy. Central banks must carefully consider how to regulate and integrate digital currencies into their existing monetary frameworks.

The increasing globalization of financial markets has interconnected economies in ways that were not as pronounced in the past. This interconnectedness exposes economies to external shocks and vulnerabilities, making it difficult for individual central banks to control their domestic economies. A crisis in one part of the world can quickly ripple through global financial markets, affecting exchange rates, capital flows, and trade. Central banks must consider these global dynamics when formulating monetary policy, emphasizing the importance of international cooperation and coordination among central banks.

Central banks must navigate these challenges simultaneously, adapting their policies to address unforeseen crises, geopolitical turmoil, and long-term environmental issues. The role of central banks is expanding beyond traditional economic stabilization, requiring them to consider broader global risks and work in coordination with fiscal and regulatory authorities to ensure economic resilience in an ever-changing world. Monetary policy, as a flexible and adaptable tool, is essential in addressing the complex interplay of these critical factors. The different challenges have in common that monetary policy also needs to adjust and develop tools to accommodate the increasing uncertainty surrounding the future path of inflation and the real economy.

This workshop attempts to bring together researchers from different areas to address these challenges. We invite researchers to present their original work on related topics including, but not necessarily limited to, the following: 

• Monetary policy in a high inflation environment
• Change in monetary policy and financial market effects
• Inflation expectation in a high inflation regime
• Monetary policy transmission in times of uncertainty and the role of financial markets
• Macroeconomic effects of uncertainty and geopolitical risk
• Central bank communication and financial markets
• Green monetary policy and green finance
• Central Bank Digital Currency (CBDC)
• Spillover effects in expectations and uncertainty

Date and Venue: 

The workshop will be held on October 7 and 8, 2024 at the Technical University of Freiberg. 

Program:

TBA

Organizing Committee: 

Robert L. Czudaj, Technical University of Freiberg (robert-lukas.czudaj@vwl.tu-freiberg.de)

Joscha Beckmann, University of Hagen and Kiel Institute for the World Economy (joscha.beckmann@fernuni-hagen.de) 

Paper Submission:

Abstracts of papers or preferably full papers should be submitted electronically by May 17, 2024 using Conference Maker. Authors will be notified by no later than July 5, 2024.

Registration Fee:

There is no participation fee. Dinner on the first evening and lunch on the second day will be covered. Accommodation will not be covered.

Special Issue:

Macroeconomic Dynamics will publish a special issue on the topic New Challenges for Monetary Policy and Financial Markets with selected papers presented at the workshop. Papers should be submitted after the workshop via the journal's submission system and will undergo a usually review process handled by Robert L. Czudaj and Joscha Beckmann as Guest Editors. Further details on the submission procedure will be provided during the workshop.

Call for Papers

More Information