FDEF research projects to receive over 2.3M in 2023 FNR CORE Call

  • Faculty of Law, Economics and Finance (FDEF)
    10 November 2023

The Faculty of Law, Economics and Finance is pleased to announce the successful submission of three projects that will benefit from the Luxembourg National Research Fund (FNR) CORE grant. The researchers have secured a total funding of approximately EUR 2.3M.

CORE is the central research programme of the FNR. It is aimed to strengthen the scientific quality of Luxembourg’s public research in the country’s research priorities adopted by the Government on 20 December 2019 which have emerged to be of particular importance for the societal, ecological, and economic development of the country.

These four interdisciplinary research priority areas are industrial and service transformation, personalized healthcare, sustainable and responsible development and 21st century education. To qualify for CORE funding, the projects should be innovative and of high scientific quality and all of them are peer reviewed by international reviewers.

Project FAIT

Martina Fraschini, Assistant Professor in Digital Finance from the Department of Finance will be Principal Investigator for the project “Fintech And Artificial Intelligence For Inflation Targeting” (FAIT). This project will benefit from an FNR commitment of 737,000 EUR and was accepted within the Industrial and Service Transformation priority.

This project aims to investigate the potential of Central Bank Digital Currencies (CBDCs) and Artificial Intelligence (AI) to improve central banks’ efficacy in inflation targeting and help them achieve their policy objectives.

The project comprises three working packages, the results of which will help academics and policymakers understand inflation dynamics better. Prof. Fraschini’s study seeks to develop strategies for effectively integrating these technologies into central banks’ frameworks and facilitate more robust policy implementation and responsiveness.


Julien Penasse, Associate Professor in Banking and Corporate Finance from the Department of Finance, will be coordinating the project “Macroeconomic Risk Forecasting”, or MACROFOR. Prof. Penasse’s project, with an FNR commitment of 654,000 EUR, was accepted within the Industrial and Service Transformation priority.

The MACROFOR project introduces an innovative framework for monitoring and forecasting macroeconomic conditions, alongside the risks of rare yet significant events such as financial crises, pandemics, and wars. The project will gather diverse data, including macro-financial indicators, economic uncertainty measures, and data on infrequent occurrences like geopolitical conflicts and natural disasters.

The project will reexamine several critical questions in macro-finance: the impact of significant uncertainty shocks on macroeconomic outcomes and the role of financial information in forecasting macroeconomic tail risk. The analysis will facilitate a deeper understanding of risk pricing and perception in equity and options markets over an extended period and across a broad range of economies.


The project of Christos Koulovatianos, who is a Full professor in Finance at the Department of Finance, on “Understanding And Quantifying Driving Forces And Effects Of Populism”, or POPULISM, has received an FNR commitment of 868,000 EUR, was accepted within the Sustainable and Responsible Development priority.

The main goal of the project POPULISM is to quantify the role of populism in shaping market and political outcomes. The main applications of the project will focus on modelling the interplay between socioeconomic disparity measures, societal polarisation, political attitudes, voting patterns, austerity policies, financial instability, and the evolution of populism through social media platforms. By providing a systematic quantification of the phenomenon, policymakers can design resilient political institutions and evaluate policy choices to deal more effectively with the destabilizing forces of populism.

Congratulations to our researchers on securing grants for these impactful research projects.

You can find more information about the CORE grant and a summary of all successful projects on the FNR website.