The ERC has awarded Christoph Trebesch the Consolidator Grant for a major empirical research project on geopolitical rivalry and its consequences for capital flows and the global financial system. The grant with the title "Great.Power.Finance" will receive 2 million euros in funding over a period of 5 years. How does geopolitics and great power rivalry determine the level, composition and direction of international capital flows? How do geopolitical shocks such as wars affect financial returns and how can investors hedge against these risks? And how do rising powers use infrastructure investments as a strategic tool to extend their influence abroad? To answer these questions, the project will collect 200 years of detailed data on cross-border investments.
Filling knowledge gaps
"The world is entering a new era of great power rivalry. I want to understand how these developments affect the global economy and global finance. Because major shifts in the international order occur only every few generations, we need economic history for answers. 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 about the role of state power in global finance is limited. More generally, the literature on geopolitics and international economics is still in its infancy. I want to contribute to fill these knowledge gaps," said Christoph Trebesch.
"Winning the ERC Consolidator Grant is an outstanding confirmation of Christoph Trebesch's extraordinary scientific achievements and ambitions. We are very pleased that he will be able to expand his very topical and relevant research with the help of the grant at our Institute and will support him to the best of our abilities. He has already proven in previous projects how he can extract highly relevant insights for research and economic policy from historical data going back a long time," said Holger Görg, Acting President of the Kiel Institute.
A decision based on excellence
Proposals to the ERC are solely evaluated on the basis of academic excellence. ERC grants are given to leading scientists and aim to support ground-breaking, high-risk, high-gain, frontier research.
Christoph Trebesch is an empirical economist, head of the research center International Finance and Macroeconomics at the Kiel Institute since April 2017, as well as Professor of Macroeconomics at Kiel University. In 2022, he founded a new Research Initiative on Geopolitics and Economics at the Institute. Trebesch is working at the intersection of international finance and macroeconomics, economic history and political economy. He completed his doctorate at the Free University Berlin and then moved to the University of Munich before joining the Kiel Institute. A unifying theme of his work is a focus on rare events, meaning events that occur only every few years or decades, but, when they do occur, they have enormous economic consequences. This motivated his research on financial and debt crises, on the rise of extremist and populist political forces, on China’s financial ascent, and now on geopolitics and great power rivalry.