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A brief overview on the research profile of the Institute

The general research goal is the analysis of economic problems related to food, agriculture, and issues of rural areas, with an emphasis on policy issues. More specifically, the main research focus is on the development of the agricultural and rural sectors in both Hungarian and other Central and East European countries, with special emphasis on changes caused by transition and the EU enlargement. The field can be divided into five subfields: (a) studies in international agricultural trade, employing the new theoretical and empirical developments. The focus is mainly on the agricultural trade of the European Union. (b) Vertical co-ordination in agri-food sectors, dealing with the horizontal and vertical cooperation within various agricultural chains in Hungary. (c) The analysis of agricultural prices and markets, addressing the question of how the European integration process in Hungary has affected agricultural price transmission. (d) The influence of macroeconomic variables on the agriculture in transition countries, investigating the impacts of monetary policy variables on agricultural prices and food prices in transition countries employing modern time series approaches, and (e) rural development, analysing the EU "LEADER" Programme and the concept of integrated rural development.

The group's research basically addresses evolutions in the Hungarian educational system (public education, higher education, educational finance) and labor markets (employment, wages, unemployment) but it extends to issues in health economics, informal economy, pension systems and regional inequalities. Several group members are involved in the evaluation of Hungarian educational and employment policies, and make expert work for both Hungarian and international organizations. The team publishes its own working paper series and a year-book (The Hungarian Labor Market, first published in 2000). The team had major contribution to the development of the data bank of the Institute comprising of harmonized waves of regular surveys.

The research group focuses on the study of the structure and operation of economic and social networks. Economy as a whole, markets, industries or spatial units will be analyzed as complex, dynamic, evolving and learning systems by using the theory of complex networks and generally the methods and results of network analysis. This approach is very useful in the examination of a number of phenomena when the participants' decisions and behavior during interaction are significantly influenced by their embeddedness, the system of their relations and the structural, topological and informational characteristics of these relationships. The research covers "traditional" economic issues of network industries such as network externalities and their effects on market processes or the economic issues of network infrastructure (access- and interconnection problems ...).

Considering the organization and patterns of markets and industries as the starting point for the analysis of economy, the main focus in this field is on the activities of two players: the firms and the state formulating industrial and public policy. The aim is to reveal the underlying causes of changes in corporate governance, corporate finance, firm size (including mergers), boundaries of the firms (innovation, internal production, outsourcing). Interfirm relations may be deeply influenced by public policies which we analyze in detail in every case. The studies are both theoretical and empirical, and are based on rigorous collection and examination of economic facts.

The research group analyses the nature and causes of firm heterogeneity observable within each industry and country. It focuses on the relationship of this heterogeneity with industry and macro level measures of competitiveness such as productivity, innovation and growth. To this end, the group will create a database containing information on the resources and strategies of firms on the one hand, and productivity, markups and other measures of performance on the other. It will analyze in detail pricing and production decisions and their relationship with firm dynamics and performance. Additionally, it will consider the economic geography aspects of firms' location with a special interest in urbanization and local
business environment. The research will link firm-level analysis with models describing the behavior of whole industries and economies in order to understand better the role of these firm-level patterns and growth.  

The research group supported by the Momentum Programme of the Hungarian Academy of Sciences aims at understanding, modelling and solving certain problems within the realm of game theory. The focus of research is at cooperative games, where the players' interactions generate externalities, that is, third parties, not directly participating in the activities may get affected. In partition function form games the third party is a third player or another coalition, while in dynamic cooperative games it may well be the future self of one of the acting agents. While noncoperative game theory is based on the Nash equilibrium and its variants, one of the beauties of cooperative game theory is precisely the multiplicity of solutions, that the same question can be answered in multiple ways. The problems studied are not entirely new, one of the goals is to explore the relation of the existing answers, combine their advantages, while also developing entirely new approaches. Besides the theoretical results the aim is also to apply them in economic models. The natural areas where cooperative games with externalities can be applied include the voluntary provision of public goods, the stability of international environmental agreements, the collaboration of market players, that is, cartels, free trade areas or research cooperations. The applications of power indices and matching models are especially prominent in the research profile.

The aim is to pursue research on the link between macroeconomics and economic development. These approaches rely on microeconomic foundation and it is assumed that the agents are heterogenous. The relation of macropolicies - monetary, fiscal, etc. - to other policies, like research, development and innovation is also investigated.

Matching problems under preferences have been studied extensively by economists, game theorists, computer scientists and mathematicians since the seminal paper by Gale and Shapley appeared in 1962. The main motivation for the research in this area is coming from the applications, the centralised matching schemes, that have been established since 1952 to allocate residents to hospitals, students to schools or universities, and kidneys to patients, just to mention a few. The scientists in this field not only study the theoretical questions arising in the applications, but often initiate new applications and help to design or redesign existing matching schemes. This work has also been recognised with the 2012 Nobel memorial award in economic sciences given to Roth and Shapley. In our project we will conduct a multidisciplinary research focusing on the game theoretic, algorithmic and mathematical aspects of market design. Besides the theoretical research motivated by the applications, we will continue our involvement in the design of practical applications.

Ongoing and planned projects endeavour to investigate the interaction of public services and finance, public policies and markets, the role of government levels, the relationship of social partners, relying on fiscal federalism, new economic geography, industrial relations, bargaining theories and median-voter theorem, among others.

 Further research

IEHAS conducts basic and applied, as well as interdisciplinary research on many further areas of economics and the related fields, such as the history of economic thought, etc.

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MTA - Magyar Tudományos Akadémia HAS
Hungarian Academy of Sciences
Page last modified: 13 December, 2016