Funding period: 01.07.2026 – 30.06.2030

In this project, we examine the effects of tax expectations and tax uncertainty on the prices of financial contracts and corporate decisions. Tax expectations depend both on potential changes in tax law and on tax uncertainty at the level of tax administrations and case law. Therefore, it is necessary to examine tax expectations and uncertainty. We develop new measures of tax expectations and uncertainty, calibrate them using market data, and conduct econometric tests to determine whether our measures have plausible, statistically significant, and economically significant effects on the prices of financial contracts and corporate decisions.

Funding Institution: DFG

Reseachers Uni Tübingen: Monika Gehde-Trapp

Other Researchers: Caren Sureth-Sloane

Funding period: 01.10.2026 – 30.09.2029

Modern macroeconomics increasingly relies on Heterogeneous Agent New Keynesian (HANK) models to study the distributional effects of monetary and fiscal policy. Yet almost all of these models rest on the assumption of Full-Information Rational Expectations (FIRE) — an assumption that is rejected by survey evidence and that makes solving large models computationally costly. This project replaces FIRE with empirically grounded, heterogeneous expectation-formation rules. It proceeds in three steps. First, we synthesize evidence from household surveys such as the ECB's Consumer Expectations Survey and use latent-variable methods, complemented by machine-learning-based analyses of macroeconomic narratives in media data, to classify households into distinct expectation-formation types. Second, we embed these types into a tractable "HE-HANK" model with adaptive learning and solve it without imposing FIRE, which turns the costly fixed-point problem into a fast, single-pass simulation. Third, we use the calibrated model to study how heterogeneous beliefs shape business-cycle dynamics and inequality, and to revisit key policy questions — forward guidance, unconventional fiscal policy, and countercyclical stimulus — when households differ in how they form and update their expectations.

Funding institution: Fritz Thyssen Stiftung, Köln

Researchers: Lütticke, Ralph (principal investigator), Müller, Gernot (principal investigator)

Funding period: 01.07.2026 – 30.06.2030

As part of this research project, we are examining the effects of climate policy uncertainty on the economy and financial markets. We begin by analyzing the impact on the decisions of real-economy actors, financial intermediaries, and households. We then model and empirically quantify the effects on the prices of financial securities. Our approach is characterized by the following three main points: 1. We develop new techniques to measure climate policy uncertainty based on novel data sources, such as news feeds. 2. We develop models for the pricing of securities that appropriately account for the role of climate policy uncertainty. 3. We analyze the role of financial intermediaries in investment decisions under climate policy uncertainty. Through all three of these areas, our goal is to provide recommendations for action to policymakers and market participants.

Funding Institution: DFG

Researchers Uni Tübingen: Monika Gehde-Trapp, Hasti Kakakhani

Other Researchers: Nicole Branger, Melanie Schienle

Funding period: 01.08.2023 - 31.07.2028

The objective of the project is to push the frontier of our understanding of how the adoption of information and communication technologies (ICT) affects the internal organization of firms and thus firm productivity, employees’ careers and wages; how ICT adoption affects the organization of firms’ global value chains (GVC) and thus domestic employee outcomes; and how ICT adoption affects the foreign sourcing of innovation and thus domestic innovation. Existing research gives only partial answers to these questions as it provides limited insights into the economic mechanisms behind the effects of ICT adoption and the organization of GVC. Research is impeded by lack of data with exhaustive information on ICT, GVC, and firm and employee outcomes. This project will change that. We will assemble novel, comprehensive data sets with specific information on firms’ ICT use, GVC, balance sheets, and patents, as well as all employees’ characteristics, tasks, and wages. We will break new ground by developing theory and conducting theory-based empirical analyses that both identify causal effects and shed light on the economic mechanisms behind them. The project consists of three parts. Part 1 exploits unique features of the data to study how ICT adoption induces firms to reorganize employees. We will analyse changes to task complexity and autonomy, careers and wages within employees over time to explore complementarities between higher availability of information due to ICT and employee knowledge. Part 2 quantifies the effect of ICT adoption on offshoring, and, for the first time, studies how ICT adoption and offshoring jointly affect the task complexity and autonomy, careers and wages of employees, testing the predictions of task-based models. Part 3 evaluates the effect of ICT adoption on offshoring of research and development (R&D), a key determinant of growth, and derives and tests novel conditions under which foreign R&D complements or substitutes domestic innovation.

Funding institution: European Research Council (ERC), Brüssel, Belgien

Researchers: Gumpert, Anna (principal investigator)

Funding period: 01.02.2025 - 31.01.2028

Financial literacy is essential for social participation, financial planning and well-being. However, financial literacy tends to be low among the general population, particularly among young people with low socioeconomic status and limited reading and numeric skills. The joint research project FiLapp addresses this challenge by developing a mobile assessment tool for everyday financial literacy. The smartphone-based assessment scenarios are based on authentic financial decision situations. This mobile approach aims to improve accessibility and motivation among a target group that traditional testing formats often struggle to reach. The instruments are validated across several empirical studies and will be enhanced with automated performance feedback. FiLapp explores how digital assessments can help address educational inequality. All assessment scenarios and teaching materials will be released as Open Educational Resources after project completion, enabling a transfer into educational contexts.

Funding institution: BMBFSFJ-funded joint project with the University of Mannheim,  Technical University of Munich & Leibniz Institute for Research and Information in Education (DIPF)

PI: Prof. Dr. Taiga Brahm

Funding period: 01.01.2024 - 31.12.2028

Since the Great Recession of 08/09, two interrelated economic phenomena challenge politics and research alike. First, the return of aggregate volatility marking the end of the Great Moderation. Second, the rise in economic inequality to levels last seen during the Gilded Age. A new literature has responded to this challenge by adding heterogeneity to business cycle models (HANK). Even though this is a major step ahead, these studies restrict themselves to certainty-equivalent solutions in aggregate shocks.
My research agenda aims to make ground-breaking progress by developing a new computational toolbox that allows to study the relative strength of aggregate and idiosyncratic risks and their interaction in inequality, asset returns, and business cycles.

Funding institution: European Research Council (ERC), Brüssel, Belgien

Researchers: Lütticke, Ralph (principal investigator),Hidalgo Higueras Albert, Winkelmann Yannik, Weiß Maximilian

Funding period: 01.10.2024 - 30.09.2027

This project evaluates the effectiveness of financial education interventions and identifies the conditions and target groups for which they are most successful. It develops a theoretically grounded evaluation framework and applies it to 12 financial education programs. The Tübingen subproject investigates the German Bundesbank's digital interactive e-book, Understanding Money.

Funding institution: BMBFTR-funded joint project with University of Mannheim, Mannheim Institute for Financial Education (MIFE), RPTU (Kaiserslautern-Landau) and ZEW (Mannheim)

PI: Prof. Taiga Brahm

Funding period: 01.03.2023 – 28.02.2027

In this research project, we examine how frictions influence the organizational structure of investment managers and what consequences this has for portfolio allocation, price formation in financial markets, and financial stability. Building on the findings from the first funding period, the focus is on the behavior of investment managers who respond to risk and liquidity constraints by, on the one hand, adjusting their portfolio positions and, on the other hand, delegating key functions to third parties. The analysis focuses in particular on i) the consequences of outsourcing liquidity management and trading in fund shares to so-called authorized participants in the context of exchange-traded funds (ETFs), ii) optimal deviations from benchmark indices—including the use of derivatives and securities not included in the index—with regard to liquidity management through cash holdings; and iii) the implications of synthetic replication, in which returns are generated via total return swaps rather than direct investments. By linking portfolio positions to investment managers in the United States and Germany, the project contributes to a deeper understanding of delegated financial intermediation, its regulatory challenges, and its impact on the stability and functioning of financial markets.

Funding institution: DFG

Researchers: Monika Gehde-Trapp, Leonardo Minoia

Funding Period: 01.03.2023 – 28.02.2027

In this research project, we examine how frictions influence the organizational structure of investment managers and what consequences this has for portfolio allocation, price formation in financial markets, and financial stability. Building on the findings from the first funding period, the focus is on the behavior of investment managers who respond to risk and liquidity constraints by, on the one hand, adjusting their portfolio positions and, on the other hand, delegating key functions to third parties. The analysis focuses in particular on i) the consequences of outsourcing liquidity management and trading in fund shares to so-called authorized participants in the context of exchange-traded funds (ETFs), ii) optimal deviations from benchmark indices—including the use of derivatives and securities not included in the index—with regard to liquidity management through cash holdings; and iii) the implications of synthetic replication, in which returns are generated via total return swaps rather than direct investments. By linking portfolio positions to investment managers in the United States and Germany, the project contributes to a deeper understanding of delegated financial intermediation, its regulatory challenges, and its impact on the stability and functioning of financial markets.

Funding institution: DFG 

Researchers: Monika Gehde-Trapp, Leonardo Minoia

Funding period: 01.01.2024 - 31.12.2026

The objective of this Research Unit (RU) is to provide a comprehensive analysis of the effects of international tax rules on intended and unintended margins of multinational firm activity and their consequences for economic outcomes and welfare. Our goal is to bring the literature forward by making fundamental contributions including the generation of an extensive dataset on tax rules suitable for quantitative research and to inform policymakers' decisions. This project is devoted to coordinate the participating researchers and the six projects in this RU.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Deutschland

Researchers: Wamser, Georg (principal investigator), Valeria Merlo, Frank Stähler, Martin Ruf, Isabel Pilson

Funding period: 01.11.2023 - 31.10.2026

This project will develop a better understanding of how different margins of real MNC activity are affected by ATARs and taxes. The emphasis is on the modelling and consideration of the effect of tax instruments in all countries in which an MNC operates. In particular, this project examines the following issues. First, the role of internal capital markets for real investments and the consequences of TCRs for the allocation of funds and investment within the firm. Second, the consequences of TP legislation for real investment, employment, asset and ownership structure. Third, this project will include a quantification of the aggregate costs of ATARs by setting up a quantitative model of FDI that includes taxation and ATARs.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Deutschland

Researchers: Merlo, Valeria (principal investigator), Georg Wamser, Frank Stähler, Isabel Pilson

Funding period: 01.10.2022 - 30.09.2026

A growing literature is concerned with the role of financial intermediaries for the pricing of assets (intermediary asset pricing, IAP), which provides the leitmotif for this research unit (RU). Being financial economists with a strong econometric background, we have identified some methodological gaps in the IAP literature, which motivate our econometrics-focused research project. In particular, the theoretical base papers consider highly stylized stochastic equilibrium models, which do not lend themselves to standard econometric analysis. The alternative, resorting to the calibration of these models, cannot provide the rigor of econometric analysis.
Empirical analysis of IAP models is dominated by studies that use a linearized stochastic discount factor (SDF), such that regression analysis can be applied. However, the scope of such studies is limited, because the linearized model and the original framework are only loosely connected. The aim of this project is to build a stable bridge between theoretical IAP models and their empirical analysis.
For that purpose, we rely on simulation-based methods, which we have used in prior work for the econometric analysis of important structural models in financial economics. These econometric approaches are a variant of the method of simulated moments and a version of the indirect inference method. The latter is explicitly designed to connect the theoretical and empirical models with the help of so-called binding functions. However, the application of these methods is not a trivial exercise. It requires a profound knowledge of the real-world data-generating processes as well as a deep understanding of the workings of the theoretical model. The RU provides an ideal environment for our project, because we can rely on the expertise of the collaborators specializing in theory as well as the empirically oriented researchers with a deep knowledge of the data. The econometric analysis will initially focus on seminal models of intermediary asset pricing. As the RU projects evolve, we will enlarge the scope to theoretical IAP models to be developed within the group.
Besides simulation-based methods, we will also replace the aforementioned linearized models by alternatives that rely on the original non-linear SDF, which will be suitably extended. Using the (non-linear) generalized method of moments, we will perform empirical analyses that assess the role of financial intermediaries for different asset classes, and we will address an empirical puzzle that concerns the pro-cyclicality of the equity ratio of the intermediary sector. Our econometric framework allows to address these issues in a coherent methodological setting.

Funding instiution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Deutschland

Researchers: Grammig, Joachim (principal investigator), Jantje Sönsken, Constantin Juri Hanenberg, Dalia Elshiaty

Funding period: 01.04.2023 - 31.03.2026

Economic inequality has received considerable academic attention in recent years. Empirical analyses—often conducted at the aggregate level—have examined the various consequences of economic inequality. However, little attention has been paid to the question of how economic inequality affects the purchasing behavior of individual households. Research from related disciplines (e.g., psychology) suggests that consumers place importance on their relative status compared to others and that they signal their status to their social circle through consumption decisions. Since consumers primarily compare themselves to better-off individuals in their social environment, it is to be expected that changes in economic inequality will also lead to changes in household consumption behavior, particularly for products whose consumption is visible to others and among households at the lower end of the income or wealth distribution. However, these relationships have not yet been empirically investigated. The goal of this project is therefore to close this gap by bringing together two separate strands of research: research on consumer decisions and research on economic inequality.
To achieve this goal, we plan to use several comprehensive data sources.

Using U.S. tax data, we will first calculate measures of economic inequality at the ZIP code level and combine these with three different data sources, each of which captures different aspects of household purchasing behavior. In Work Package 1 (WP1), we will examine the proposed relationships at the brand/product-week-store aggregation level, using data covering the majority of all stores in the U.S. food retail sector over more than 10 years. In Work Package 2 (WP2), the analysis will be based on household-level panel data, also from the United States. Both WP1 and WP2 will focus on consumer spending on consumer goods. Work Package 3 (WP3), on the other hand, will address consumer investment in durable goods, drawing on data from the U.S. automotive market.
Economic inequality is of great importance for social cohesion and political stability. With this project, we aim to contribute to the state of the literature in this field. In addition, we expect the project to deepen our understanding of how consumers respond to macroeconomic changes. Finally, the project results will provide insights into how households adapt to changes in economic inequality, which is important for businesses, policymakers, and consumer advocacy groups alike.

Funding institution: Deutsche Forschungsgemeinschaft e. V. (DFG), Bonn, Deutschland

Researchers: Papies, Dominik (principal investigator), Biewen, Martin (principal investigator)

Funding period: 01.07.2022 bis 31.12.2024

We study the capacity-building measures in the fiscal administration in East Germany after reunification in oder to understand whether and how it is possible to increase capacity in the public administration.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Nordrhein-Westfalen, Deutschland

Researchers: Gumpert, Anna (principal investigator)

Funding period: 01.07.2021 - 30.06.2025

Ressourcen sind das, was Gesellschaften bewegt. Menschen erzeugen ihre eigenen gesellschaftlichen Grundlagen und sorgen für deren Erhalt, Verfügbarkeit und Nutzung. Gleichzeitig verändern sie im Prozess der Inwertsetzung dieser Ressourcen ihre sozialen Beziehungen. Dies wiederum wirkt auf die Ressourcen zurück, die im Rahmen der gesellschaftlichen Reproduktion ebenfalls transformiert werden. Ressourcen sind somit einerseits Produkte gemeinschaftlichen Handelns, andererseits Quellen der Erneuerung des sozialen Lebens. Gegenstand des SFB 1070 sind diese vielschichtigen sozio-kulturellen Dynamiken im Umgang mit Ressourcen. Im Verständnis des SFB 1070 können diese Grundlagen des sozialen Lebens sowohl materielle wie immaterielle Ressourcen sein, entscheidend ist, dass die Menschen ihnen einen kulturellen Wert für ihre Form des Zusammenlebens zuschreiben. Ressourcen werden im SFB 1070 nicht isoliert betrachtet, sondern als Teil von Ressourcenkomplexen. Darunter werden Netzwerke von Dingen, Personen, Wissen und Praktiken verstanden, in denen die einzelnen Elemente durch das Wechselspiel von Intention und Materialität aufeinander wirken. Diese Ressourcenkomplexe dienen in konkreten Räumen und zu bestimmten Zeiten der Erschließung, Gewinnung und Nutzung von sozial relevanten Ressourcen. Der Umgang mit diesen Ressourcen löst bestimmte Dynamiken (Entwicklungen, Bewegungen, Bewertungen) aus, also mehrdimensionale Veränderungsprozesse, die in einem engen Wechselverhältnis mit kulturellen Vorstellungen und Praktiken stehen. Da diese kulturellen Voraussetzungen maßgeblich bestimmen, was als Ressource definiert wird und wie man mit ihr umgeht, lassen sich aus vergleichender Perspektive unterschiedliche RESSOURCENKULTUREN ausmachen. Darunter sind Modelle zu verstehen, die in diachroner Perspektive die Beziehungen zwischen kulturell geprägten Ressourcen, Umgangsformen und sozialen Ordnungen bzw. Identitäten darstellen. Sowohl die Ressourcenkomplexe als auch die RESSOURCENKULTUREN werden als Gefüge (assemblage oder agencement) verstanden, also als Netzwerke von Phänomenen unterschiedlicher Materialität und Temporalität, die das Produkt historischer Entwicklungen und ihrer Beziehungen zueinander sind. Ziele des SFB sind die Neukonzeptualisierung eines kulturwissenschaftlichen Ressourcenbegriffs, die Erkenntnis diachroner sozio-kultureller und politischer Entwicklungen, das Verstehen der Prozesse der Raumerschließung und Identitätsbildung sowie das Erfassen der symbolischen Dimensionen von Ressourcen. Die Ziele sollen durch die enge Kooperation von Archäologien (Ur- und Frühgeschichte, Archäologie des Mittelalters, Naturwissenschaftliche Archäologie, Klassische Archäologie, Vorderasiatische Archäologie, Biblische Archäologie), Philologien (Klassische Philologie, Vorderasiatische Philologie), Geschichtswissenschaften (Alte Geschichte, Mittelaltergeschichte, Neuere Geschichte, Wirtschaftsgeschichte), Geographie (Physische Geographie und Bodenkunde), Empirische Kulturwissenschaft und Ethnologie erreicht werden.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Deutschland

Resaerchers: Jörg Baten, other Pi’s see here: https://fit.uni-tuebingen.de/Project/Details?id=9461

Funding period: 01.01.2021 - 31.12.2022

With this research project, we aim to evaluate the effectiveness of two current approaches to quantifying risk premiums in financial markets, whose underlying philosophies are fundamentally different. The first approach is theory-based and forward-looking, in the sense that it interprets and extracts investor expectations from option data. The second approach is data-science-based, utilizes machine learning methods, and does not rely on an explicit financial theory framework. The options-based approach has not yet found its way into financial practice, but machine learning methods are enjoying enormous popularity among fintech companies. They are also experiencing a resurgence in academic financial research. Much of this is reminiscent of the high expectations placed on quantitative models in finance during the 1990s and 2000s. However, the machine learning methods used are often opaque, and their implied forecasts have the character of a black box. Furthermore, the options-based approach also relies on approximations whose significance and limitations have not yet been examined. This finding highlights the problem of uncritically applying both approaches, given that an insufficient understanding of the limitations of quantitative financial models was a contributing factor to the recent economic and financial crises. 

With this project, we aim to help prevent the recurrence of such developments and to provide a critical comparison of the empirical performance of the options-based and data science approaches to approximating risk premiums. To enable such a comparative study, it is necessary to create a comprehensive database and a robust IT infrastructure; for this reason, the efforts of two active research groups at the Universities of Frankfurt and Tübingen—whose areas of expertise are compatible and complementary—are being combined. Using newly developed approaches, we aim to examine the extent to which data science and option-based methodologies can be combined and to identify the possibilities and limitations of such hybrid strategies.

Funding instiution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Deutschland

Researchers: Grammig, Joachim (principal investigator), Jantje Sönsken, Constantin Juri Hanenberg

Funding period: 01.01.2020 - 31.12.2022

This Project is devoted to generating the comprehensive dataset on tax rules that will be at the heart of the Research Unit (RU). The main objective of this project is to collect, describe, and provide data to measure tax incentives to be utilised in the other projects. Beyond data collection (statutory corporate tax rates, depreciation rules, anti-tax-avoidance rules, bilateral tax agreements, value added taxes, investor-level taxes, etc.), the project also aims at calculating forward-looking effective tax measures, which are comprehensive measures of tax burden. The data will be described and the main features of the data will be documented in data handbooks and survey articles. Datasets will be made available to researchers of the RU (where the data will be used to address particular research questions) and to a broader public after completion of the RU's projects

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Nordrhein-Westfalen, Deutschland

Researchers: Wamser, Georg (principal investigator), Valeria Merlo, Frank Stähler, Martin Ruf, Kristina Stephanie Strohmaier, Manuela Campos Ibarra

Funding period: 01.01.2020 - 31.12.2022

This project will develop a better understanding of how different margins of real MNC activity are affected by ATARs and taxes. The emphasis is on the modelling and consideration of the effect of tax instruments in all countries in which an MNC operates. In particular, this project examines the following issues. First, the role of internal capital markets for real investments and the consequences of TCRs for the allocation of funds and investment within the firm. Second, the consequences of TP legislation for real investment, employment, asset and ownership structure. Third, this project will include a quantification of the aggregate costs of ATARs by setting up a quantitative model of FDI that includes taxation and ATARs.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Nordrhein-Westfalen, Deutschland

Researchers: Merlo, Valeria (principal investigator), Georg Wamser, Frank Stähler, Manuela Campos Ibarra

Funding period: 01.01.2020 - 31.12.2022

The objective of this Research Unit (RU) is to provide a comprehensive analysis of the effects of international tax rules on intended and unintended margins of multinational firm activity and their consequences for economic outcomes and welfare. Our goal is to bring the literature forward by making fundamental contributions including the generation of an extensive dataset on tax rules suitable for quantitative research and to inform policymakers' decisions. This project is devoted to coordinate the participating researchers and the six projects in this RU.

Funding institution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Nordrhein-Westfalen, Deutschland

Researchers: Wamser, Georg (principal investigator), Valeria Merlo, Frank Stähler, Martin Ruf, Kristina Stephanie Strohmaier, Manuela Campos Ibarra

Funding period: 01.02.2018 - 31.01.2021

Inconsistent results of previous research on the impact of public policies on maternal employment as well as large unexplained variance in maternal employment patterns call for alternative explanations. A recently growing body of literature has theoretically highlighted the importance of the cultural context for maternal work engagement. Nevertheless, there is scarcity of studies which would analyse the interaction effects between different aspects of cultural context and the impact of public policies, as well as company work-family reconciliation policies on maternal employment. In our project we aim to contribute to the literature in this respect. Our basic theoretical framework is based on Kurowska’s adaptation of Amartya Sen’s Capability Approach to comparative analysis of family policies (Kurowska 2016a). This framework enables to conceptualize the relationships between different means designed for work-family reconciliation and the observed work engagement of mothers, with a particular focus on the role of cultural context. Our project proposal aims to explore the role of cultural context as a ‘converting factor’ (Sen 1999) in moderating the impact of public childcare policy and flexible working arrangements at the company level on maternal (capability for) work engagement, work-family reconciliation and work-life balance achievement. When exploring the impact of cultural context, we will particularly focus on attitudes towards maternal employment/parenting/childcare orthodoxies and working environment. We will also look at the relationships between informal and formal childcare, i.e. two types of ‘means‘ which are used to achieve the ‘valued functionings’ (Sen 1999), such as work engagement, work-family reconciliation and work-life balance. Doing so, we will pay particular attention to appropriate estimation and identification strategies.

Funding instiution: Deutsche Forschungsgemeinschaft e.V. (DFG), Bonn, Nordrhein-Westfalen, Deutschland

Researchers: Pull, Kerstin (principal investigtor)