FEDERATION WALLONIE-BRUXELLES (ARC)

Coordinator: Alexia Autenne (JURI, UCLouvain-FNRS), Pierre Devolder(ISBA), Axel Gosseries (ISP and JURI, UCLouvain-FNRS), Jean Hindriks(CORE), and Vincent Vandenberghe (IRES)
Researcher:SefaneCetine
Financement: FédérationWallonie-Bruxelles
Date: September 2018-August 2023

The provision of replacement income s(pensions) for old people is among one of the main achievements of modern advanced economies. Historically, the State and other entities successfully organized the provision of public pensions. There is no doubt that this contributed to the wellbeing of elderly citizens. It is also likely to have played a significant role i the reduction of old-age poverty. However, public pension budgets are now increasingly challenged by demographic and economic developments, namely rapid population ageing combined ith slow(er) economic growth. Hence, policy makers around the world are confronted with the challenging task of reforming existing pension systems.
The interdisciplinary research project aims at critically assessing the key conditions that a public pension system should fulfill to boe successfully reformed. Our hypothesis is that there are three such conditions: (i) financial sustainability, (ii) social adequacy and (iii) safe governance. Hence, the 'SAS' acronym.
The goal of this project is to identify the pension architecture that is the most likely to generate SAS pensions. That research will rest on diverse approaches (conceptual, numerical, empirical and normative) to assess the properties of various possible pension architectures, through the prism of SAS criteria.

Negative and Ultra-low Interest Rates: Behavioral and Quantitative Modeling (NeMo)

Coordinators: Catherine D'Hondt (LFIN), Julio Davila (CORE), Leonardo Iania (LFIN and CORE), Christian Hafner (ISBA and CORE), Olivier Corneille (IPSY) and Frédéric Vrins (LFIN and CORE)
Researchers: Aleksandar Todorovic (LFIN) and Linqi Wang (LFIN)
Finance: Fédération Wallonie-Bruxelles
Date: September 2018-August 2023

Interest rates are a cornerstone of economics and finance. Tey are at the foundation of asset pricing and monetary policy, and more generally of all intertemporal choices made by market participants and institutions every day, with huge consequences for the economic activity and wellbeing of our societies. Until recently, it was assumed (most implicitly) that interest rates could only possibly be positive. Notwithstanding, in the wake of the financial crisis initiated in 2008, major central banks of developed countries have been brought to conduct rates policies that turned them negative. The consequences of such a paradigm shift are both potentially huge and not well understood yet. This research project aims at shedding light on these consequences, both from an academic and a policy viewpoint, following three intertwined research lines that bring together a multidisciplinary team of researchers working on behavioral finance, macro finance, and quantitative finance.