Bilkent University Department of Economics, chair Prof. Refet Gürkaynak has been awarded a European Research Council (ERC) Consolidator Grant. Prof. Gürkaynak will be using the funding provided by the council for his research project, “Theory and Empirics of Asymmetry”
ERC funding is regarded as the most prestigious research funding in Europe and aims to stimulate scientific excellence in Europe by supporting the very best researchers in any field of research. Excellence is the sole criterion for selection; there are neither thematic priorities nor geographical quotas for funding. ERC competitions are open to top researchers from anywhere in the world.
In his project, Prof. Gürkaynak will first study empirically whether macroeconomic outcomes, financial market responses to macroeconomic news, and implementation and effectiveness of macroeconomic policies are symmetric or not. Are recessions and expansions mirror images of each other? Do the size of financial market responses to economic news depend on whether these are good news or bad news, whether they arrive during expansions or recessions? Are macroeconomic policies equally effective when they are expansionary and contractionary; when they are implemented during expansions or recessions? Do policy makers themselves behave symmetrically during expansions and recessions? These empirical questions broadly remain open in the economics literature. Based on the empirical findings, the second part of the project will undertake theoretical modeling to help understand what may bring about any asymmetries that are observed in the data.
Since the start of the ERC funding program in 2007, Prof. Gürkaynak’s grant is the 6th ERC grant received by Bilkent University and in terms of being the first ERC that Bilkent University has taken in the field of social sciences, it has a big importance.