CEPS funds economic policy-related research projects within Princeton’s Department of Economics. Examples of projects that have been completed recently or are currently underway include:

• Alan Blinder has been working on three policy-related topics. The first is offshoring, where his estimates of the number of U.S. jobs that are potentially "offshorable" created a stir. This work is now being refined and extended. The second is the organization of monetary policy committees, where his work has focused on committee structure and communications. The third area is supply shocks and stagflation, which has become topical again as markets fret over the possibility of "re-living" the 1970s.
• Avinash Dixit has been comparing the behavior of democratic and autocratic rulers. Neither kind of ruler can achieve his or her most desired outcome (the "first-best"), because both must work through bureaucracies in order to implement their policies, and the interests of the bureaucracies may differ from their own . Dixit argues that autocrats are less willing to give up monetary returns ("rents") to being in charge of the government than democratic rulers. As a consequence, autocrats provide less money to incentivize bureaucrats, and their "second-best" solution is worse than that for democratic rulers.
• Henry Farber has been studying job loss and the decline in job security and worker-firm attachment in the U.S.
• Pinelopi Goldberg is examining the incomplete pass-through of exchange rate shocks on import and consumer prices from a microeconomic perspective using highly disaggregate product level data. In addition, she is investigating how firms in developing countries adjust to trade openness through changes in their productivity and product portfolios.
• Nobuhiro Kiyotaki completed a study of the interaction among housing prices, aggregate production, and household behavior. An important innovation in his work is explicit modeling of the role of financing constraints in the housing sector.
• Alan Krueger is studying the impact of occupational licensing. In the early 1950s, less than 5 percent of the U.S. workforce was covered by state licensing laws, but by 2000, Krueger estimates that figure had climbed to at least 20 percent.
• David Lee is studying the impact of unionization on the equity value of firms.
• Burton Malkiel's current research focuses on three topics: China's financial markets, mutual fund flows and behavioral finance, and returns and risk from hedge fund investments.
• Harvey Rosen will be studying the economics of altruism. To date, most of the literature on this subject has tried to determine the economic and demographic characteristics of individuals that are correlated with their propensity to donate to charities. Rosen's research will look at the other side of this "market," that is, the behavior of charitable organizations that seek to influence potential donors.
• Christopher Sims is studying the application of new theoretical approaches in order to understand the relationships among fiscal policy, monetary policy, and central bank independence.