I have been awarded a European Commission FP7 grant for a collaborative project entitled: Macro Risk Assessment and Stabilization Policies with New Early Warning Signals (RASTANEWS). The project focuses on research about the future of macro-economic and monetary integration in Europe. Professor Karanasos’ contribution is aimed at the application of time series analysis for modelling financial and macroeconomic (in)stability.

RASTANEWS intends to enhance knowledge base, at both theoretical and an applied level, on many aspects of the future of macro-economic and monetary integration in Europe thus paving the way to a revised governance of the EMU, and the EU as a whole, in the wake of the debt crisis. To facilitate the timely identification of macro risks, the project proposes a new system of early warning indicators, to be implemented within the EMU surveillance mechanism. This proposal is consistent with our theoretical framework and is based on an empirical macro-finance approach.

Twelve European universities worked together on this project. RASTANEWS received the highest rating out of more than 100 grant applications. The grant was