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Economics

Our researchers focus on theoretical and empirical analysis of economic decisions and phenomena. Welcome to the world of economics.

A greenish blackboard with white text. A person teaching is seen, blurry, in the background. Photo.
Photo: Charlotte Carlberg Bärg

The theoretical analyses aim to identify, conceptualise and characterise economic problems in order to provide solutions to them. Examples of problems are poverty, public spending, unemployment, school choice and house allocation.

The empirical studies analyse existing data about economic decisions and phenomena to determine statistical relationships and causal links between important economic variables like income, education and unemployment, but also between economic variables and other factors like risk-taking and genetic factors. Empirical studies connect to the theoretical analyses by testing theories and by making observations that demand theoretical explanations.

Main subject areas in economics

Research at the Department of Economics is organised in a number of specialised research areas:

Research in Labour Economics may address macro-level concepts such as labour supply and unemployment, or micro-level concepts such as the determinants of human capital. Our labour economists are micro-oriented with an emphasis on credible empirical methods.

The Department of Economic’s own webpages

 

Financial economics is a multifaceted area; in addition to core subjects like asset pricing, risk management, and corporate governance, it encompasses the legal, regulatory, tax, and governance frameworks surrounding the financial system.
We have a well-established group of researchers in financial economics. The team currently collaborates with all major Swedish universities, and has built a strong Nordic network, collaborating with all major Nordic universities.

The Department of Economic’s own webpages

The research group in econometrics consists of time series econometricians, who overlap to a large extent with macroeconomists and a number of financial economists at the department, and of some microeconometricians, mainly within labour and health economics. There are also a few theoretical econometricians. Other researchers within the department have econometric applications, but their research will be found within their own specialisations.

The Department of Economic’s own webpages

Development Economics and International Economics are two closely linked fields of Economics, aimed at answering questions that are related in various ways to this overarching issue. Courses at the undergraduate and graduate level and research in these two fields play an important role at the Department of Economics.

International Economics deals with the causes and consequences of economic transactions – such as trade and foreign direct investment – between countries. There is a tradition at the department for studying these issues in relation to European economic integration.

The Department of Economic’s own webpages

Health Economics is the application of economic theories and methods in the area of health. The Health Economics group conducts a wide range of applied and methodological research on the multifaceted relationship between health and economic factors/behaviours.

Studies produced by the group shed light on the demand for health, investigating among other things the consequences of chronic diseases and unhealthy behaviours such as alcohol and tobacco consumption, and obesity. The group also studies the impact of economic determinants in early life and adulthood, both at the individual level and at the macro-level, taking into account the potential health effects of recessions and booms.

In addition, the Health Economics group investigates the incentives and organisation within public and private health care, together with health systems organisation in terms of efficiency of health care production and distribution of resources between groups in society. The Health Economics group also conducts successful research on methods and applications of economic evaluations of medical technologies and prevention.

The Department of Economic’s own webpages

We have a long history of research within the field of macroeconomics. One strand of research focuses on fiscal and monetary stabilisation policies and how globalisation and the growth of the financial sector impact the possibility for a small open economy to conduct an independent stabilisation policy. This research also includes studies on the relationship between monetary policy and inequality in a low interest environment. Macroeconomic research at the department includes empirical as well as theoretical work.

The Department of Economic’s own webpages

Microeconomics studies the behaviour of economic agents, such as households and firms, and their interaction with various forms of economic institutions. The microeconomics research group is made up of a large and active group of researchers working on a wide range of topics.

One subgroup specialises in market/mechanism design and social choice theory. The research focuses primarily on the design of strategy-proof mechanisms, auction design, voting rules, and provision of public goods. Another active group of researchers uses empirical and experimental methods to understand individual decision-making and behaviour in games. The topics of research include cooperation and communication in games and decision-making under risk and uncertainty. Other research areas include cooperative and non-cooperative game theory, public economics and industrial organisation.

The Department of Economic’s own webpages

Public and institutional economics has had a strong standing at the department over the past 60 years. The interest in the subject derives from the early Swedish work in the area and the large public sector arising from the creation of the welfare state.

There have been notable theoretical contributions to the economics of natural resources, taxation and the theory of justice as fairness and a variety of applications to areas such as industrial organisation, taxation, pension systems, health economics and labour economics.

The Department of Economic’s own webpages

Our strengths

An important strength of our Economics research is that it covers several fields and uses different methods at the same time as each field has produced research of high international standard. As a result of this faculty members have recently been able to publish in internationally top-ranked research journals, not in one field, but in several.

The most prominent research fields at the department include econometrics, financial economics, international economics, and applied and theoretical microeconomics.

List of our research in Economics in the Lund University Research Portal

Tackling questions facing society

One important contribution to society is indirectly through education. Each year, about 2000 students are registered on courses at the Department of Economics. Through our research-based education, new findings and methods will spill over to the students and impact their understanding of society and the economy. We take pride in working together with colleagues from different departments and faculties on several programmes.

Economics is one of the oldest subjects within Lund University. We trace our roots back to Samuel Pufendorf (1632–1694), professor of Law, as well as an economist. He laid the groundwork for economics at Lund University back in the 1600s.

Our most influential economist historically, was most likely professor Knut Wicksell (1851–1926). Many would claim that his most important contribution was his theory of interest. For instance, the concept of natural rate of interest was invented by Wicksell. This is the interest rate which is compatible with stable prices. This concept facilitates the understanding of inflationary and deflationary processes.

Global games

Another significant idea is the concept of global games. This concept was developed in the 1990s by professor emeritus Hans Carlsson in collaboration with a researcher from the Netherlands and has been applied to better understand bank runs, currency crises and bubbles.

Today the most influential research in Economics at the School consists of empirical studies in many different areas. These studies often use and combine high quality data from Scandinavian registers.

Kidney exchange programme

A project that has had direct practical life-and-death consequences for people, and involves collaboration between economists and medical experts, is the design of a kidney exchange programme in Scandinavia. In this project, our matching theory experts applied their methods and knowledge to kidney exchange problems.

Professor Tommy Andersson on kidney exchange research – staff.lu.se

Risk-taking on financial markets

Another example is the research effort trying to understand the origins of risk-taking on financial markets. The acceptance of risks has important financial consequences for people. However, little is known about the extent to which these relationships are genetic or determined by environmental factors. To be able to distinguish between genetic and environmental factors, data on stock market participation of Swedish adoptees is used and related to the investment behaviour of both their biological and adoptive parents. The researchers conclude that – when appropriate controls are applied – environmental factors appear to dominate.

Learn more in the Lund University Research Portal:

Learning to Take Risks? The Effect of Education on Risk-Taking in Financial Markets. Review of Finance

On the Origins of Risk‐Taking in Financial Markets. The Journal of Finance

Contact

Fredrik Andersson
Professor, head of department

Professor Tommy Andersson at LUSEM explains auction theory with focus on the 2020 Nobel Prize in Economic Sciences.