Research Grant category «Research Hubs» of the research program RESTART 2016-2020 with title «Mixed Data Sampling (MIDAS) models: Theory and Applications» funded by the Research Promotion Foundation, Research Coordinator: Prof. Elena Andreou.

The objective of the proposed project is twofold. The first objective is to develop novel econometric models that extend current state-of-the-art techniques for modelling the dynamic behaviour of economic time series which are useful in macroeconomic forecasting as well as economic policy making. The new models apply the Mixed Data Sampling (MIDAS) idea to develop further Factor type models with mixed frequencies which have broad applications in macroeconomics and financial economics. The second objective is to develop novel econometric techniques for evaluating and monitoring financial indicators and structural changes which are useful in periods of financial distress and economic crises, and which can be early warning indicators of instability in economies. These techniques will develop sequential change-point tests which test on-line, with the arrival of new data, the stability of economic indicators, capitalizing on the mixed frequencies and properties of financial variables in producing early warning indicators of financial distress in economies or financial institutions. Forecasting and monitoring key economic variables is one of the main activities of financial and government institutions, economic forecasting agencies, investment companies and is useful to economic policy makers.

Research Grant category "DIDAKTOR" of the research program RESTART 2016-2020 with title "Dynamic consumer behavior in car ownership" funded by the Research Promotion Foundation, Research Coordinator: Prof. Sofronis Clerides.

Understanding consumer behavior is an important task of economics. An automobile is the largest item most individuals will ever purchase (besides a home), hence economists have dedicated much effort in analyzing the factors that determine automobile purchase decisions. One of the limitations of existing research is that it relies primarily on aggregate data as there is no information on consumers’ purchasing patterns over their lifetime. The proposed project aims to make a contribution to the literature by exploiting a unique dataset that records every vehicle registered in Cyprus since 1970. As of 1987, the dataset also records transfers of ownership and an identification number for the vehicle’s owner. Thus we can track every vehicle’s entire ownership history and each individuals' automobile holdings over time. A comprehensive descriptive analysis of this unique dataset will provide valuable insights into consumer behavior in durable good markets and will inform the development of tractable but also realistic dynamic models of consumer behavior.

Research Grant of the research program RESTART 2016-2020, International Collaborations Dual Targeting with title "Group Factor Models" funded by the Research Promotion Foundation, Research Coordinator: Prof. Elena Andreou.

This project will develop novel models, tests and tools for Group Factor models to analyze big data of different categories/classes and/or of different sampling in order to provide new results in econometric theory and macro/finance applications which are useful for economists and economic policy makers. The project aims at establishing a strong research team between universities and financial institution policy makers Cyprus and the USA. The research project is funded by the Research Promotion Foundation (RESTART 2016-2020, International Collaborations Dual Targeting). The Principal Investigator of the project is Professor Elena Andreou.

Research Programme "Composite Leading Indicator", Research Coordinator: Prof. Elena Andreou.

The Composite Leading Indicator (CLI) or Leading Economic Index (LEI) for each country is one of the key indices monitored internationally by economists, policy makers, financial organizations and the public, since it provides leading information about the state of the economy. The CLI/LEI is an index designed to provide early signals of turning points in business cycles showing fluctuation of the economic activity around its long term potential level. State-of-the-art econometric techniques will be applied in order to develop a CLI/LEI index for the Cyprus economy comparable with the corresponding indicators in other countries. The research project is funded by Hellenic Bank.

Research Grant of the Marie Sklodowska-Curie Individual Fellowships (SOCIENTITY_PR, Grant agreement: 894128) "The Role of Social Identity on Preferences for Redistribution", Research Coordinator: Prof. Andros Kourtellos, Researcher: Dr. Kyriakos Petrou.

The goal of the action is to understand and uncover the role of social identity on the formation of preferences for redistribution. The fellowship entails the mobility of the researcher to the University of California, Los Angeles for 24 months and his return to the University of Cyprus for 12 months. The research objectives of the proposed research are twofold: (1) Investigate the effect of social identity on preferences for redistribution and (2) Investigate the existence of multiple regimes and parameter heterogeneity on preferences for redistribution. The fellowship will result in high-quality research and targeted policy papers to eliminate several negative social phenomena impacting the academic community, the Cypriot and European policymakers, and the general public.

In addition to the five areas listed above, research at CypERC is further diversified through the study of specialised topics, such as long term energy planning in Cyprus, the evolution of car ownership in Cyprus, determinants of bank lending standards in Cyprus, technological progress, trade and conflict.

Research Grant "SInnoPSis" of the research program H2020-WIDESPREAD-2018-2020 with title "ERA Chair in Science and Innovation Policy & Studies" funded by Horizon2020, Research Coordinator: Prof. Zacharias Maniadis.

The challenge of understanding the processes of research and innovation requires strong interdisciplinary collaboration. The ERA Chair in Science and Innovation Policy & Studies aims to tackle this important challenge by bringing to UCY an interdisciplinary research team with the purpose of conducting cutting-edge research and facilitating cross-fertilization between departments. The focus of research is on understanding research institutions and the incentives they engender.  SInnoPSis will evolve into a highly international and outward-oriented research unit, organizing interdisciplinary activities that will enhance networking and international collaborations.

Research Grant for an "Economic Policy Modelling Hub- Cyprus Recovery and Resilience Plan 2021-2026", Research Coordinator: Prof. Elena Andreou.

The project aims at developing current state-of-the-art models/tools for the evaluation and impact of economic policies/reforms which are important for the public sector and other organizations for policy-making as well as the monitoring of policies and new growth models.

The investment will be comprised of 3 actions:

  • Action 1: Economic Policy Modelling Hub at the Economics Research Centre: New Models, Tools and Data for Economic Policy Analysis and Evaluation.
  • Action 2: Transfer knowledge and training of public sector employees at the Ministry of Finance. Upgrade the public sector tools and skills for economic policy analysis and evaluation (e.g. economic impact assessments, economic evaluation and monitoring of reforms).
  • Action 3: Development of big data and data analytics (collection and linkages of different databases in collaboration with the government) for informing and monitoring economic policies, especially in real-time, also useful for modelling, nowcasting and forecasting.

Additional information for the project and the Cyprus Recovery and Resilience Plan can be found at: Cyprus Recovery and Resilience Plan 2021-2026.

Research Grant: “Cyprus and the EU sanctions on Russia: macroeconomic impacts and policy recipes for a sustained recovery”, Research Coordinator: Dr. Stylianos Sakkas.

Cyprus faces significant economic challenges stemming from its trade relationship with Russia in the midst of the Ukraine war. While financial ties to Russia have decreased since the financial crisis, the exposure through trade in services, especially tourism, remains substantial, contributing over 25% to Cyprus' economy. Additionally, rising utility and transportation costs due to increased energy prices are causing persistent inflationary pressures and likely diminishing consumer confidence. Given these consecutive shocks and limited fiscal space, there is a critical need to revitalize Cyprus' economy sustainably, utilizing the funds from the Recovery and Resilience package.

To address these challenges, this project aims at building a dynamic micro-founded macroeconomic model in order to assess the macroeconomic impacts of the Ukraine-Russia war on the Cypriot economy. Moreover, it seeks to formulate policy recommendations for achieving a stable economic recovery, particularly by assessing the medium to long-term macroeconomic impacts of the Next Generation EU-Recovery and Resilience Plan.

More information about the project can be found on LSE’s (Hellenic Observatory’s) website.