The world is entering a new era of great power rivalry, with the rise of China and the Russia-Ukraine war being only the most visible signs. This proposal asks: What are the implications of these developments for global finance? Will China’s rise accelerate financial globalization or rather reverse it? What do the growing tensions between great powers imply for financial markets around the world? And what motivates China to invest trillions of dollars of state funds into its Belt and Road Initiative (BRI)? It is difficult to answer these questions, because major shifts in the international order occur only every few generations. We therefore need to look back, but existing research in international finance mostly relies on evidence since the 1970s – from an era dominated by the US and in which states had limited influence on capital flows. As a result, our knowledge on the role of state power in global finance is limited. More generally, the literature on geopolitics and international economics is still in its infancy. With this proposal, I want to fill these gaps. I use theory, rigorous empirical methods, and comprehensive new data to study how the rise and fall of great powers (or geopolitics) shaped global investments over the past 200 years. In part one, I embark on a major data gathering effort on North-South capital flows and investor returns at a micro-level, covering tens of thousands of individual bonds, stocks, and infrastructure projects since 1800. In part two, I use this comprehensive new data to analyse: (1) how changes in the international balance of power influence the global allocation of capital; (2) how geopolitical shocks such as wars affect investor returns in the short and long run; and (3) whether and how rising powers use infrastructure investments as a strategic tool to extend influence abroad, in particular to advance their energy security, access to scarce raw materials, and for military control.

Popular wisdom has it that no other investment is as ‘safe as houses’. Households have rigorously followed this investment advice. At the beginning of the 20th century, home ownership was the exception, not the rule. 100 years later, about two thirds of Europeans own the houses they live in. Homes have become the most important asset of households and mortgage loans have driven the growth of the financial sector, becoming its main asset. In the 2008 crisis, the housing market was the epicentre of shocks to the wealth of households and the health of banks. The rise of debt-financed home ownership has transformed household portfolios and the balance sheets of banks. Yet the effects on the macroeconomy and the implications for financial stability are not well understood. We do not have a good understanding of how risky residential real estate is as an asset, how growing housing wealth affected the overall wealth distribution, or why housing and credit markets are prone to creating boom-bust cycles. SafeHouse aims to close this gap and break new ground in the macroeconomic and financial history of housing markets in 13 European countries as well as Australia, Canada, Japan and the U.S. from 1870–2015. I will pursue three main goals. First, I will determine the long-run price of housing risk, its time variation, and geographic heterogeneity, based on an extensive data collection effort. Second, I will track the evolution of housing wealth in the 20th century and quantify its contribution to much-debated trends in wealth inequality. Third, I will study the causes of boom-bust episodes in housing markets, focusing in particular on the interaction between house prices and credit supply. By combining the production of new historical data with state-of-the-art quantitative analysis, SafeHouse will open new avenues for macroeconomic and financial research on housing markets, inequality, and financial stability.

The EU and its Member States pursue a wide range of policies that address migration, including development cooperation, border management, and legal labour market access. To be effective, policies must be based on an accurate understanding of how individuals decide whether to migrate. DYNAMIG will fill critical gaps in scientific and policymakers’ knowledge about how the decision-making behaviour of potential and actual migrants interacts with policies given micro, meso, and macro factors, e.g. different socioeconomic status. We focus on Africa as the most important future region of origin for migrants to Europe. We pursue a multi-disciplinary approach along four dimensions: First, we extend existing conceptualisations of the dynamics of migration decisions along extended trajectories and test these through innovative methods, including digital diaries collected from migrants en route from Nigeria, Kenya, Senegal, and Morocco to Europe. Second, we develop a mobile-device-based tool for online choice experiments to causally study aspiration formation across different contexts and stages of migration with several tens of thousands of individuals in origin and transit countries. Third, we study how policies affect migration decision-making with methods that allow causal interpretation: choice experiments with respondents in different contexts; a randomised controlled trial of an entrepreneurship training intervention in Senegal; and a quasi-experimental analysis of the EUTF for Africa. Fourth, through interviews with high-level policymakers and textual analysis of policy documents, we analyse how the design of EU, Member State, and relevant African policies that address migration takes into account migrant decision-making. To maximise our impact on policymaking, we embed our research in an intentional process of joint knowledge creation with stakeholders in Europe and Africa, including the policymaking community, migrant and diaspora organisations, and civil society.

The goal of this research proposal is to re-examine the nexus of social, economic and spatial inequalities in the EU, the various typologies and the arrangements and mix of policies addressing them, in the light of emerging and highly interacting mega-trends and challenges, threatening to increase pressures and make policy choices even more difficult. As new and older drivers of change are projected to create a rather unfavorable environment for balanced growth and socio-spatial resilience, this research will focus on the analysis of policy responses, aiming to make them more pro-active, inclusive and effective. The novel contribution of the proposed research project lies on a holistic and integrated approach that relates in an interactive way drivers to outcomes and levels of aggregation. The aim is to detect, model and map the interdependence among drivers of inequality and outcomes (including circular causality) in a multi-level, poly parametric context with specific tailor-made policy recommendations.